Yesterday Indian Stock Market saw the biggest plunge in a decade. The BSE started the day by a near 20% fall and ending with an overall about 10-12% fall.
I strongly feel the markets’ over reacted yesterday. Only two valid reasons could be attributed to the southward sentiment – One being the change in government supported by Left Parties and the other being the rise in Worldwide Oil Prices. But both are not sudden happenings, indications for both have been there for over a week now.
Today the markets have done better, gaining over half of the loss. One of the reasons attributed to this being Dr.Manmohan Singh’s likely selection as Prime Minister.
In the long term, I see the Indian markets to do very well. The fundamentals of the Indian Economy are good, GDP is raising, Exports are growing, Forex Reserves are booming & Indian Enterprises are reaching out to other markets. Even in my recent trip to Sri Lanka I saw good indications for this. In many places across the capital ‘Colombo’ I could see recognizable Indian Brands. This included the PSU giant Indian Oil in its incarnation as IOC Lanka, South Indian Motorbike manufacturer TVS Motors & Indian Scooter Producer Bajaj for their 3-wheelers. Not only these brands were visibly present in the Island nation, they were also doing well and were commanding good brand image,
market share and quality perception.
Overall I am confident that the (Indian) tiger has woken up; and the world is certainly ready for it!