New Delhi: The Indian stock market is witnessing a deep correction but, it is not isolated in its pain as most of its Asian peers are also falling. So what has led to this fall?
All global and emerging markets are falling and some have even taken a harder hit than India.
Analysts say that the fall essentially started off with Fed Chairman Bernanke’ statements about rising inflation and continued rise in interest rates.
This has spooked all markets through and through.
The consensus is that US is going to enter an area of stagflation (a combination of no growth and rising) and this is what is causing the slump in the markets.
If one compares how these Indices have fallen and the savage fall that they have had benchmarked against the 1997 and 2001 correction, it is interesting to note that all emerging markets have shown recovery between 80-150 per cent in the past 12 months.
One will have to wait and see whether this will be a prelude to possibly another bull run.
However, Morgan Stanley apparently seems to think otherwise.
Speaking on the local perspective, Rajesh Jain of Pranav Securities said, "One cannot rule out the fact that sentiment is bruised and battered. There is not any fresh commitment coming in. People are taking up opportunistic positions. So there is little commitment left in the market. We are seeing fund flows in a wavy kind of situation."
He added that, at this point, the problem with the market was the lack of commitment and sustained fund inflows.
Buying was practically getting postponed and sustained buying was required to take the market out of this level.
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