BSE sensex hits bottom

The Sensex fell by two hundred points amid growing speculations of further fall in the volatile market. Starting at a score of 16362 points, it was close to 16162 at the end of the day. The abrupt fall has further increased the worries of the seasonal investors who are still reeling under the recession wave.

Road to Perdition?
The recent years have witnessed a disappointing trend in the market with high variations at low intervals. The market, once known to hit the 20000 mark with vigor and vision had lost 702 points about a year and months ago. This is the second steepest fall in the recent months. The sudden fall has also been blamed at the decrease in the value of the rupee which sadly stands at Rs.49.90 against the dollar, making it one of the worst performers in the Asia’s most traded currencies.

The continued degradation in the European markets coupled with the snail paced growth of the US market has already caused a major concern over the Indian financial climate. The fall in the ratings of Greece, Portugal and other markets have increased the instability of the investors who are extremely worried over risking their money.

The fall in the points has also been attributed to the rise in the inflation rates. The current inflation rate, which is close to 10%, has increased the burden on the financial aspect of the investors. This has resulted in the increasing sell-off of equities to ease the pressure and hence the robust fall. The inflation has also been accompanied by the increasing interest rates adding to the woes of the investors.

The new dilemma

The 21 % fall in this year’s market has fueled the worries of the RBI as it has put India under the spotlight in the eyes of the rating agencies. The ministry of Finance and the RBI must stake some strong steps in order to address the current scenario before it is too late. A drop in the ratings due to the dismal performance is the last thing on the minds of the Ministry of finance.