Factors Responsible For Downfall....

Hello Everyone,

I don't think any one of us should take this ABRUPT activity lightly. A faill of around 250 to 350 or even 400 points a day can be accepted, but now the market is moving across 500 points just like a joke... and millions of poeple out there might be loosing lot of money when this happens....

My question : Does such a think also happens in the western markets that I think are more regulated and mature as compared to Indian market!? Do their indices move so fast in a matter of even 20 mins ? I don't expect and think so... Experts, pls comment on this....

For now, my intention for starting up this thread is to hunt down all CAUSES of this downfall... Well truly some might be REAL and genuine, others might be hidden and illegal ones.... ( time to remember Harshad Mehta )

For now, my guessed FACTORS that are responsible for such an abrupt reaction are :

- US inflation increasing and thus Central Banks increasing their interest rates that reflect an upcoming slowdown in consumer spending and thus slowdown of US economy. The same will reflect in lesser US imports, and thus a slowdown of economy in 3rd world countries such as China and India.

- Abrupt fall in metal prices, that may appeal investers to take position in metals at the moment.

- The Indian finance minister asking 41% shortterm gain tax from FIIs and thus FIIs not investing more AND taking out their positions.

- US Bonds have become more lucrative proposition for secured investments and thus FIIs taking out their money from Indian markets and investing into US bond market...

- A sooner expected abrupt increase in Oil prices here in India since our government hasn't increased the oil prices even though international oil prices had a massive increase and are in fact now in the downtrend from their very recent peaks! So while internationally the prices will be decreasing for other countries, for us Indians, the prices will increase from NOW adding to another economic bottleneck!

- India is still short of electrical power in several states and thus the fundamental requirement for economic growth is truly lacking at the moment in Indian region.

- The leftists creating a new problem over here with their ANTI-Privatization stand.

- Some of the Indian stocks have become overvalued...

- Interest rates in India to rise as well.... and thus an expected slowdown of Indian economy too is inevitable.

- Taxman imposing more taxes in the form of new service taxes + implementation of VAT throughout the country adding up to increased taxes in the hands of the government while all this increased overall tax being drawn from the very individual earning citizen of the country!

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I invite everyone to comment on my expected factors that I've speculated. There may be other factors as well... I invite everyone to put forward all possible core factors that are be responsible for this CHANGE in the consistent uptrend in the form of heaving slidings taking place even in a matter of half an our during past several days... something that has never happened before...

Is this the way our markets will behave from now?

Lets discuss,
Regards to all members of the community,
Sanjay Kapoor.