Stock Markets Exposed

analysing the Indian stock market...?

Hi can any one tell me what was the reason behind the recent stock market crash..not only in India while in most of the other economy....

Public Comments

1. y r u asking me how would i know
2. like Joel Greenblatt said, stock market is just like a crazy person. No body knows exactly whats the exact reason behind.
3. The credit crunch has hurt the US financial companies, and is starting to cause fear of US recession. If the US goes into recession, business spending will decrease, and the need for Indian technical services will decrease, especially from the financial sector ( a major outsource of IT services). This will hurt the Indian economy, and all economies that export to the US. When the US economy catches a cold, the world economy gets the flu.
4. It has been a long time (we can see the past 3-4 months) since the liquidity in the Indian market . Every person started investing in the market just looking at the momentum of stocks rather than the fundamentals. This led to the over valuations of the mid cap and small cap stocks. Even a small news about the company led to an unnecessary increase in the price. Adding to the chaos were the new people entering the market with their money and investing in the stocks and very high activities in futures and options. People started taking huge positions in futures and options and it was almost close to gambling. As the markets were already overheated with most of the sectors getting over valued it had to undergo a correction at some point of time. The new year sales and all kept the markets on the song. Now, with the weakening of the US markets and the market sentiment the FIIs (these form a major chunk of our market investments) removed all the money they had invested in the Indian markets. This led to a panic situation and the whole market came down crashing like a pack of cards.
5. Indian markets had rallied quite a bit too high in a short duration. This is not a healthy sign to any market. Valuation based trading should happed in a healthier market. So when the global cues were not supportive, the market sank on its own weight. After this crash, corrections have set in and the valuations seem to be reasonable now.
6. hi, 1. due to sub prime fears & real effects of it. 2. fear of US slow down. 3. due to above reason panic selling which brought free fall of the market. go through http://vbulls.com and some more sites.
7. it was a unique story,, never told before.. this is the way market keeps itself young.. It is now again attractive & booming.. www.shares2share.blogspot.com
8. Many factors. One, there is a change in the global investment climate. One of the primary triggers is the huge fear of the United States' economy going into a recession with foreign institutional investors trying to reallocate their funds from risky emerging markets to stable developed markets. Analysts are now expecting a cut in US interest rates. Hedge funds and FIIs could have been the biggest sellers in the Indian markets, booking profits and making the most of the unprecedented bull run that has dominated the Indian stock market for a long time now. The current volatility is also linked to global bourses. There is a big correlation among global markets. The presence of hedge funds across asset classes, along with increased global movement of capital, has increased event-related volatility. Volatility in commodities markets has also significantly affected equity markets.