How Demonetization Would Be Helpful In Stock Market?

In the last few years, the Indian Government has taken various steps to kerb the black money that is prevalent in the market but the boldest step came in the form of demonetization of the currency. With this course of action, it is clear that the Indian government is discouraging any financial transaction with such black money. Although the effects have been discouraging the stock market so far but ultimately it will boost the financial market in exchange of black money as well as the physical market.

The equity and debt market will be mostly benefitted with the demonetization and they will serve as the major hubs for investment in the future. With the recent move, the rates for fixed deposits have come down by 5.5-6% which has been providing a better outlook for the equity shares. The equities for the long term investment are very beneficial for the investors as the growth in terms of earnings will be supported by the utilisation of the capacity. This has increased the upside potential of the equity market verily. Thus, it can be said that at present the equity market is volatile or risky but the long term outlook of the market has increased severely.

Due to the demonetization, the security yields of the Government will touch a level within next six months that no one can even fathom. Therefore, the fixed incomes will become good looking all over again. So the debt market will provide the investors with a multitude of different opportunities.

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