Today, as on very poor international clues our markets on opening bell as yet again hell seems to have broken loose on the markets. All that talk of the world markets having placed a bottom last week suddenly appears to have been too optimistic. A fresh bout of grim economic reports in the US, UK, Europe and Japan has heightened worries that a global recession is now inevitable. And, it could be a long and painful road to recovery.
Global investors continue to shun risky assets like equity and shift to safe haven assets like government bonds and gold. At the same time, growing concerns of a crippling global recession has sent crude oil into a tailspin. Which generally is seen to be quite a positive event for India, but the slide in the rupee has to a large extent nullified that advantage. Also, investors and traders are more concerned about the incessant selloff in the stock market. Meanwhile, governments and regulators across the globe continue to look for ways to stop the bloodletting and end the logjam in credit markets.
Coming to India, the Centre, RBI and SEBI are pulling out all stops to shore up liquidity, encourage more dollar inflows and check relentless selling in the stock market. There may be some temporary relief, but the weak global markets will once again play spoilsport. Brace up for another sharp fall as markets in the US, Europe and Asia have lost anywhere between 6-10%. And, though we had a fall of more than 5% yesterday, another round of selling is expected in the wake of the global rout. We would continue to advocate caution as the key indices may fall below last week's lows. One can only pray for some sort of rebound in Asian and European markets as the day wears on. That again should give you no reason to get in as yet.
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