Impact of Recent Developments in Global Capital Markets on Indian Capital Markets

Abstract

Over the years, the global economy continues expanding with efficient corporate balance sheets, accommodative macroeconomic policies, and favorable financial market conditions. At the same time, growth and interest rate differentials in favour of United States, allow for a smooth financing of global imbalances. The same forces, however, have also created larger global imbalances and have given rise to more risks. Consequently, the emerging markets have become more resilient to disturbances. In short, recent economic and market developments have reduced risks in the near term, are storing up potential vulnerabilities for the future.