Tuesday, February 5, 2008

The steep Fall

The Indian stock markets have fallen drastically over the past two weeks. As we have seen the markets fell almost 15oo points the heaviest falls seen in our history. The reasons for the same are 1) the US sub prime mortgage crisis 2) The new IPO's i.e Reliance Power, Future Capital, etc. leading to liquidity (liquidity crunch) crisis 3) The budget decision phase to begin. 4) Steep Market Correction.
Its seen that the Indian Market was overvalued & needed correction but the new IPO's induced a very steep correction that the market stock brokers had not anticipated leading to huge margin calls overdue by Trading members. Thus a number of trading members were suspended on account of insufficient balance.