All three USA indexes soared into Thursday’s close (http://www.marketwatch.com/story/us-stocks-set-for-gains-after- brexit-polls-point-to-stay-vote-2016-06-23), with the Dow surging 230.24 points, or 1.3%, to finish at 18,011.07, while the S&P 500 gained 27.87 points, or 1.3%, to close at 2,113.32.
Advertisement
The vote, which echoes the rise of populism, will shape the future of Europe.
Brexit, or Britain’s possible exit from the 20-member European Union through a referendum, has sparked concerns of ripples in the global economy and markets.
“A further unraveling would undermine global growth prospects already clouded by aging populations and miserable productivity”, he said in the article.
Indian conglomerates like the Tata Group for instance, have massive operations in the UK.
But like Arun Singh, Srivastava also sees India being an eventual beneficiary of Brexit.
Yet, there are arguments that getting out of the European Union would enable Britain to forge new trade pacts with India and other countries. The Confederation of Indian Industry (CII) pointed to the fact that India invests more in the United Kingdom than in the rest of Europe combined, and has emerged as the that country’s third largest foreign direct investor.
This “binary” effect, where prices are expected to advance/decline sharply, is one reason why investment in financial markets is certainly not for the fainthearted right now.
For India’s second largest IT services provider Infosys also Europe is a huge market with significant presence in the UK. What happens to poundEuro will impact our currency competitiveness. Markets worldwide were jolted following UK’s referendum throwing up a surprise vote in favour of exit. What is required in such a scenario is forex reserves.
Nevertheless, the World Trade Organization has predicted that British exporters risk an extra £5.6 billion ($8.2 billion, 7.2 billion euros) of extra annual customs duties following Brexit.
On foreign exchange rate, Das said the government was in touch with RBI. “But the core of Indian economy remains unchanged”, Mukherjea said.
“The kiwi is running out of oxygen at these levels no matter the result and will struggle to go much higher from here”.
“We expect the RBI intervention to smooth any INR volatility”. He added that the strategic and political uncertainty could last longer and be more profound than the economic upheaval.
Lord Meghnad Desai, an India-born economist and a UK Labour politician, argued that the impact of Brexit on the India-UK trade will be “hardly at all”. Some of the major losers during the day’s trade were Infosys, Wipro, TCS, Mindtree, and Hexaware among others.
The Union Finance Ministry is closely watching the developments surrounding the referendum in Britain on the country’s continuity in the European Union (EU). Hindalco, Wockhardt and Mindtree. “Our export and import won’t get impacted”. Despite Friday’s rapid decline in stock prices – where automobile, IT and banking stocks fell the hardest – experts feel that this reaction might have been overplayed.
Advertisement
“We are prepared to deal with the situation”. “If dollar strengthens, naturally all linked currencies depreciate and so will the rupee”, he said.
