FINANCIAL MARKET INDIA

The effect of global financial crisis is felt by the mutual funds in India rather than the Banking System. Even the debt oriented mutual funds, which are generally considered safe as compared to the equity oriented mutual funds are giving negative returns, which really tells the quality of the fund managers in those mutual funds. Generally, investors with less risk apetite prefer debt oriented mutual funds which invest in Central Government Securities, State Developments Loans, Treasury Bills (Sovereign Debt) and other short term debt instruments like Certficate of deposits (issued by Banks), Commercial Papers (issued by Corporates) and Non SLR Bonds. These investments give a steady income flow to the investors with low risk. The secondary market for SLR securities is quite liquid and valuations are more or less transparent. But in case of CD/CP/ Corporate Debt, the secondary market is not very active and there are very wide fluctuations in their pricing. Therefore, in case of huge red

As equity markets across the globe are melting down as fast as glaciers due to global warming, both the fundamental analysts and the high profile technical analysts have disappeared from the market. Thank God! we are not hearing any expert advice in CNBC on the investments and SENSEX reaching 25 K or 30K. Valuation experts are clueless and the people who were recommending buying at 20000 levels are not seen anymore. In these type of situation, people should realise that it is only GREED and FEAR among human beings that is running the market sentiment. Fearfull people sell on fears of prices going down and Greedy people buy on greed of making money on the same stock. The seasoned investors like Buffet is the firm believer in the behavioral aspect of the markets. Yesterday, in a column published in the New York Times, he said that "...I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States govern

Indian rupee has seen depreciation in the last 3 months at a rate that has confused most of the market players and analysts. If we think rationally, looking to the deep financial crisis in the USA, the value of USD should depreciate against the currencies of the countries with sound financial systems that are less impacted by the global turmoil. But ironically, INR has depreciated by more than 23 per cent in the last 9 months. There may be many reasons for the depreciation in the Indian Rupee, but if we analyze the movement of SENSEX vis a vis INR, we found some pattern in the movement. The SENSEX touched a record high of 20873.33 on 8th January 2008 and INR touched a record low of 39.2650 on 15th January 2008. It is quite evident that the sentiment in the Indian Equity market became very bullish after the FII funds inflows were very strong and SENSEX rose from a level of 4500 in early 2004 to 20800 in January 2008 (Less than 4 years). But due to the current Financial Market Crisis, th

In the present global credit crisis and stock market crashes across the globe, let us see the worst stock market crash over the last century. These are as follows: 1 ) Wall Street 1929-32 -89% The Wall Street Crash heads the list, with the US stock market falling by 89 per cent between 1929 and 1932. The burst of the speculative bubble led to further selling as people who had borrowed money to buy shares had to cash them in a hurry when their loans [were] called in. 2 ) US NASDAQ 2000-2002 -82% The second biggest collapse came from the technology-rich US Nasdaq index, which fell by 82 per cent following the bursting of the dot com bubble in 2000. 3 ) Japan NIKKEI 1990-2003 -79% In third place, with a 79 per cent decline, was the Japanese stock market, which suffered a protracted slide in price from 1990 to 2003 as a share and property price bubble burst and turned into a deflationary nightmare. 4 ) London 1973-74 -73% Next came the UK stock market’s 73 per cent drop in 1973 and 1974.