Business Mantra: Faridabad
British people voted to exit from the European Union, which they called it Brexit. There has been much hue and cry in the economies of the world, wherein it was observed that in many countries share markets tumbled, currencies crashed and many more events happened.
If it is observed in Indian perspective, it was observed that on the first day of announcement, it was the same trend as in other economies of the world. On the first day of the announcement, in India share markets tumbled and in foreign currency market rupee also showed a negative impact. Bullion market was very volatile, where gold and silver increased.
But from the very next day of the Brexit poll, Indian markets showed a sign of recovery, with share markets recovered and rupee also was back in the foreign currency market. The yield on government securities also fell, which is inversely proportional to the growth i.e. government securities also strengthened. From Indian stock markets there was no pull out by the FII( Foreign Institutional Investors)
From the above, an inference can been drawn for After Brexit Effect:
- Stock Markets in India were much lesser affected as compared to the other major economies of the world.
- Affect on Currency Market was much lesser than other economies.
- During this period there was an inflow of foreign investment rather than outflow.
- Indian Government Securities also strengthened
- Chances of “Pull Out” by Indian Companies in Britain, has been very remote.
India may be considered as a safe haven after Brexit, as the same has left relatively strong and higher growth can be expected.