May 22 2006
India’s Stock Market Crash
I am very very surprised that major news outlets have not picked up the stock market story in India. I only saw one from Reuter’s wire. The title was pretty scary: India on alert for suicides after stocks slide(c)
Basically, “market slide — which has been as much as 22.4 percent from an all-time high of 12,671.11 points on May 11″
“I borrowed money to trade in the market. I lost it all in the past two days,” said 37-year-old Sanjay Joshi, a small investor. “I don’t know how will I repay my loans.”
–Seems typical of market crash. But India is a large economy and is getting integrated into the world. Particularly, what if the commodity price drops as a result of this? If inflationary scare keeps lingering, return on energy investment diminishes and interest rate stays high: won’t world economy withdraws as a result?