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GDP role in economy and stock market

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Posted by : NIFM
1 August, 2013, 5:28 PM
Gross Domestic Product (GDP) is defined as the total production of goods and services within the country in a financial year. It is very useful to measure the growth of an economy. The economist watch the GDP numbsers to predict the future growth of tehe economy. High GDP number means high growth of the country  and low GDP growth means low growth, when the GDP of a country is low it creates the problem of recession, inflation that means less jobs, less production and opportunity for all. whenever this kind of problem occurs in the economy RBI tries to control the situation like reduces the interest rates to enhance the country growth. GDP data is also important for the stock market traders in the equity and commodity market. High GDP growth improves the sentiments of equity market while in commodity segment it is positive for base metals and crude. Lower GDP growth creates negative sentiment for equity market also negative for base metal but positive for bullions (Gold and Silver)

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