The Dominoes Effect....Indian Market loses the Trillion Dollar Run...

In my last post when I described the crazy Friday and hoped that Monday may bring in some better news, it seems that doom is doom and is not ready to quit Indian Markets.

The Times of India, today carried on its front page the story of how the Indian markets are losing money like we lose loose change in and out. The trillion dollar market that was has now been reduced well... below the trillion mark. The market had been on a steady climb since April 2007. Every sector was doing well beyond even our own belief. But, the law of the nature is that what goes up has to come down, Gravity put weight on the markets as well. Markets for the very first time came below the 13,000 mark. Thanks to this, our forex market is also going crazy and Rupee that was gaining onto the dollar has become weak again. FII's have withdrawn the money and the Stock exchange... is going nuts.

Okay, after the summary whats happening and all... lets try and analyse the vicious circle that has once again enveloped our market.

The prime reason is- CRUDE OIL PRICES. I think that I need not enumerate on that. In less than a year, the prices have doubled to what they were last year. The fire in the oil market has choked our markets.

The import and export difference has increased alot. We are again importing much...exporting less... pressures points are being pressed to the hilt. And the common man is crying the increased rates of the onions.

Weakining rupee... strengthening dollar...that means most of y relatives are going to get paid more and are going to be happy.

But now, what happens... the investors are in a frenzy.... I am one of them. I don't know how my investments are doing coz most of em are in the long term plans. But being the optimist that I am, things may improve. Apart from the business factors, a lot of political factors also play an important role in determining foreign investments. If a trend is to be spotted, the 123 nuke deal, when it was first proposed, the markets had been showing great improvements. Till, the ratification came into the view. The shakier the nuke deal goes, the markets get shakier still... and with the Lefty parties recently getting ready to topple the central government, the markets too are toppling. But the recent piece of news, that Mulayam Singh, getting ready to back the nuke deal, along with Laloo Prasad Yadav, the tremors may slow up.

Though, I don't have a major insight into the nuke deal, I firmly believe that our PM, Mr. Manmohan Singh being a finance major and one of the best finance minister that we have had till date, is intelligent enough to know the pros and cons of the deal. The left on the contrary are playing pure politics and don't give a damn about development in India. Had that not been the case, Bengal would still have been a leading capital market, as was in the time of British.

Now, the waiting game starts...and hopefully by the end of the week, when the markets close in the first week of July, there would be more to say.

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1 Thoughts:


Thursday, July 03, 2008 12:27:00 AM


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