Stock Market Future Prospect.

Any good news in the Indian Stock markets is short lived (i.e any good news can get an upside of say 5%) while any bad news can get an downside in the markets more than 6% for sure.
Just like you saw yesterday we saw a downside of 11% odd.
Can you imagine any upside of 11%. No.. I am sure.

Current Good news.
CRR at 6.5%
Repo Rate at 8%
Inflation at 11.07% well below from its peak.
Crude below 66$ , has bottomed more than 50% from its all time high.

Current bad news.
FII's high presure selling.
Bad global market cues. (All blames on Americas Sub Prime Crices.)
Liquidity crunch.
All markets at almost their 4-5 years low.

Markets may not so easily bounce back.
These are the times the investors need to be cautious.

Happy Investing!

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Also read ways to survive stock markets corrections.

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Biggest decline in Sensex in 4 years.

The Sensex has fallen more the 10% in a day only thrice in the last 20 years. On 21 December 1990, the Sensex fell 199.99 points 16.19% to 1034.96. Later, on 28 April 1992, the index fell 12.77% or 570.42 points to 3896.89. It had tumbled 11.14% at 4505.16 on 17 May 2004.

Today's steep fall on the domestic bourses was part of a global equities rout on worries of a sharp global economic slowdown. The sell-off was also due to disappointment from the second quarter monetary policy review by the central bank. Uncertainty on the final order with regard to short sales, also weighed on the bourses.

The Reseve Bank of India (RBI) kept all the key rates unchanged even as it lowered its 2008/09 growth forecast to 7.5% to 8% from a previous forecast of around 8%. The RBI also left the cash reserve ratio, the amount of funds that banks have to keep on deposit with it, unchanged at 6.5%.

There is uncertainty as to what steps the market regulator will take regarding short sales. Despite announcing its displeasure on overseas lending by foreign funds early this, the Securities & Exchange Board has not yet taken any concrete decision in this regard.

There has been a massive erosion in investors' wealth this year. The barometer index, BSE Sensex, is down 11585.92 points or 57.11% in the calendar year 2008 so far from its close of 20,286.99 on 31 December 2007. It is 12505.7 points or 58.97% below its all-time high of 21,206.77 struck on 10 January 2008.

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