Most of Asia opened the year 2008 on a weak note with heavy selling pressure seen in most markets. Comparing the major Asian market indices as on 2nd January, 2008 with their closing today, it is seen that the Straits Times has fallen by 14.75%, Hang Sang by 13.58% and the Nikkei is down by 9.29%. The corresponding figure for BSE Sensex is 13.97%.
Today the BSE Sensex has fallen by 1408.35 points or 7.41% and the NSE Nifty has closed down 496.5 points or 8.7%.
As regards domestic economic conditions, the just released Review of the Economy 2007-08 by the Economic Advisory Council of the Prime Minister has estimated the rate of growth of the GDP in 2007-08 at 8.9%. Corporate profits as reflected in the third quarter 2007-08 results continue to be buoyant. Direct tax revenues have shown an increase of 42.8% this financial year (April to December, 2007). Banks have reported that investments in the pipeline are robust and credit demand is high.
Thus, the fundamentals in the domestic economy are quite strong. Today’s market fall reflects the continuing uncertainties in the global economy and not any change in the fundamentals of the Indian economy. Investors should take informed and responsible decisions in the situation and not be led by market rumours or any unwarranted apprehensions.
BSC/SS/GN-16/08
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