The Indian stock market is a bubble that burst every few months holds. By rising to 21000 then fall to 8000, and then again risen, it thrives on speculation. Of North Korea's relatively restrained attack on South Korea main problems as recession in the United States, Europe and the world has everything to affect the power of the Indian stock market.
After months of rising on the back of the happy feelings about the economy, steering through the recession and the strong FII, the stock market to its lowest level threw tributaries in five months. It is closed to 18,396 points which has a jump of about 2600 points for Diwali on Friday That's a lot in just about 60 days. What is even more scary that investors about 11 lakh crore for Diwali including 3 lakh crore have lost wiped out in the past three days itself.
So what is happening suddenly? Where have you gone green shoots of the economy? Why do investors and traders worried again seem? If we analyse, there are three views that you can remember.
Galloping inflation was a major problem for the Government. Rising food prices of commodities like vegetables along with petrol has kerosene and even many manufactured items pressure great on our growth rate. The growth rate to be expected even IMF of India on 8-8, is 5% of a previous 9% has revised.
The cost for borrowing has greatly increased has great pressure on stocks. Scandals have been spread so far in the period of the present Government, that you wonder if life without a scandal. On a serious note caused hundreds of scandals to lose the Treasury millions of taxpayer's money have.
More than anything else has this led to lose confidence in the economy and thus very high percentage of FII outflows. There is also a matter of black money that the Government evasion by talk contracts and not directly to the point. We had all been very excited to cross almost the hurdle of the recession, when the European crisis hit, and it has taken the global economy, these many steps backwards when it had come forward.
The second view of the whole issue is that this happens a natural tendency where cooling market. Markets in India for a while with everything what is excessive speculation have been heated. And with this, the area between 13000 15000 could be set. This is likely if that could happen best buys.Although different people different views may, although a lot of money in the markets in the last lost few months, people know that you can win twice so much here in less time. And until then, the mystery of the stock market continues.
What do you think?
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