| |
| |
![]() |
| |
|
| |
|
| |
|
INDIA : The stockmarket in India ended Tuesday flat after crashing the day before.
The Indian government cut the amount of deposits that banks have to set aside in cash, joining central banks across the world in injecting liquidity as the global financial crisis escalates.
Fears of more bank failures in the US and Europe have sent Indian equity markets tumbling.
Market leaders like Reliance Industries, Tata Steel and Information Technology giant Infosys were licking their wounds on Monday when share prices started skidding.
India's banking regulator the Reserve Bank relaxed a requirement for banks, pumping another US$4.2 billion into a financial system that is facing a massive cash shortage.
That move brought some cheer to the Indian market which opened on a positive note on Tuesday.
Amid concerns that companies in the US and Europe will be forced to cut production and prune jobs, stocks have dipped to an all-time low.
Sandeep Bamzai, a business analyst said: "India's IT companies, some of which will give their second quarter results on Friday, you will find that a lot of them (may not have) very large exposure to investment banks like Lehman Brothers, Goldman Sachs and Merril Lynch.
"But you will find that there is a definite slowdown, as far as India's IT industry is concerned. You will see their earnings well below expectations."
And the negative headlines don't help either. Morgan Stanley has said global economic growth would plunge below 2.5 per cent and that India's growth this year would fall to 6.4 per cent - which is the most pessimistic forecast to date.
The Indian government however believes it will close the year with at least an 8 per cent growth.
India's finance minister P. Chidambaram said: "India is still a very attractive market to invest in and India is a very regulated market. You've heard the SEBI (Securities and Exchange Board of India) chairman say this. There is nothing to worry about the Indian market, we are suffering the consequences of turbulances around the world. The Indian market is basically sound, attractive and well regulated."
But anxiety is gripping the middle class in India.
Tens of thousands of Indians who had bought that second car, the second apartment and foreign vacations are now mourning the crash.
The great Indian middle class dream is fading with people taking personal loans and mortgaging jewellery and their homes. And assurances by the government mean little to them.
Until there's some semblance of stability in the US financial system, the global stock markets will continue to stay weak and the Indian market can only mirror that sentiment. - CNA /ls
|
