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Wednesday, March 28, 2007

FALL OF THE SENSEX & OTHER GLOBAL MARKETS


We have been witnessing the fall of global stock market indices, besides sharp falls in the Sensex.

This can be attributed to GLOBAL FACTORS + LOCAL FACTORS + MASS PSYCHOLOGY (call it “domino effect”).

Global factors……The Dow witnessed sharp falls a few days back…this was due to “bad lending” by sub-prime lenders….causing panic globally. Of course, if they fail, the lenders’ / banks / financial institutions might be in a mess…… So the Dow fell….)

Second factor was markets were overheated.

This led to Dow witnessing falls of around 2% & falls in the Pacific Rim Countries’ markets…fall on 14 March was Nikkei 225 (2.92%), Shanghai Composite, Sensex(3%), Sydney's S&P/ASX 200 (2.1%), Singapore's Straits Times(3.17%), S.Korean Kospi,(2%), Hong Kong's Hang Seng (2.8%)…..

Now let’s turn to the SENSEX.

It had touched a high of 14,500 in January 2007 & was expected to reach 15,000 + within March.

But then it started having mini crashes. It was going down to 12,500 ‘s, bounced back…people were optimistic….

But today it is down again at 12,900…..& the pundits were saying it should have been 16,000 + by this time (they were making this prediction in January)….

???Why this crash....


First of all, we're overly spooked by the GLOBAL FACTORS.....

But mainly.....

The SENSEX is witnessing a general MELTDOWN because of inherent weaknesses…..this had been previously warned by major market analysts…Merill Lynch, S&P, etc.

…….will be exploring LOCAL FACTORS & weaknesses of the Indian market next blog

;-) It’s not that weak…I should say 11,000 is the best “support level”.

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