Dalal-Street may react on weak monsoon
Going by the latest monsoon update received from the India Meteorological Department (Met), till June 17, the amount of rainfall that the whole country received was about 54% less than the 10-year average for the corresponding period. Also, for the week ended June 17, of the 36 Met divisions in India, up to 28 received deficient or scanty rainfall during the period, a research note from Emkay Global Financial said.
Although earlier this week top Met officials maintained that India will receive about 96% of the long-term average rainfall, not many are willing to take a bet on the same. ‘‘ The delay in the onset of the monsoon and rising El Nino risks has revived memories of the market selloff during the drought of 2002,” a report from CLSA, one of the largest foreign brokerages in India, wrote on Thursday.
A clear blue sky in June is slowly emerging to be a cause of concern for Dalal Street. A number of broking houses have already put their investors on alert: We could expect weakness in the market and additional pain on the fiscal front in case the monsoon is substantially below normal, which in turn could affect agricultural output.
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