Why the market is tumbling down???

Guys, finally I m posting my personal views on this issue. Now go though the reasons and see if they satisfy you.

1. Uncertain Governments of India and USA. USA would be going for elections in a couple of months. That’s why many of the IT and export based companies are doubtful about the renewal of their license. McCain and Obama are two different ends of the pole. Thus companies are waiting for the elections to be over. In India, until the Nuclear deal issue is solved, a lot of uncertainty is likely to prevail. Moreover until the result of Lok Sabha poll is out, market will remain gloomy.
2. Rising Crude Oil Prices. We all know that the price of crude oil is not decided on the demand and supply factor. And I firmly believe if in future there is going to be a nuclear war, it would be for Oil. There is no denying the fact that Crude will touch $ 200/barrel and will keep haunting the global indices.
3. Rising Inflation. Inflation is a global phenomenon now. Even though the method of calculating headline inflation varies from country to country, we all are witnessing it. This time inflation has hit hard. The raw material prices have gone high. Be it any sector, they are under tremendous pressure, even Nano is feeling the heat. Taming inflation will require improving supply-side economics.
4. Sub-prime Mortgage. Each one of us know that bourses are the slaves of big players like Mutual Fund, Brokerage Firms and HNIs. The Sub-prime mortgage has hit all MNC banks and big players in a big manner. Trillion dollars have been lost. The big players like CITY, Hedge Funds etc are in tremendous pressure.
5. Weakening Dollar. Dollar has weakened against majority of currencies in the world. As a result currencies like Rupee, Yen have appreciated creating the problem.
6. Election Year. Last but not the least, since this is an election year, government lacked in making policies which are in favor of corporate. May it be ECB, Monetary policy, Exemption in IT, FDI et al. So, the result is evident.
7. Business Cycle. Like every business, markets also follow a cycle….. this is for sure the recessionary phase….. After every night there is a fresh morning…. So guys donn loose your heart…

Regards
Praveen Kumar
www.laymansfinance.blogspot.com

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