As far as the global economy is concerned, the US is showing the early signs of resuscitation, Japanese numbers look better than they have for a long time, and China has become an attractive magnet for Indian exports, like steel.
Looking at the microeconomics of the recovery, Indian companies in many sectors are seeing the fruits of their efforts to increase productivity.
Many have benefited from a global commodity price upswing, as in soda ash and steel. The responsiveness of top lines and bottom lines to even a relatively modest macroeconomic upturn have, so far, been striking. Clearly, all these factors are combining to drive stock market valuations to levels not seen for more than two years.
But is the surge of optimism, on the stock market and elsewhere (the NCAER quarterly survey of business confidence shows a massive upswing), running ahead of the real numbers?
And is it possible that the recovery is more fragile than the numbers, particularly those coming out of the stock market, would have us believe? The Reserve Bank doesn
