This is the fifth in a series of entries that Alfred Romann will post from India in the coming weeks.
China is on the lips of just about every Indian with money to invest. And the setiments are less than flattering.
The way in which a decline in the Shanghai Stock Exchange last week contributed to falls around the world is a sign of the interdependence of the global financial markets as well as the emerging maturity of China’s bourses.
India didn’t escape the carnage and the drop was felt, deeply, in Delhi and Mumbai.
“Budget jitters, Chinese flu send Sensex plunging,” ran the headline on the front page of Thursday’s Hindustan Times. The story was the only one on the page not dominated by the country’s annual budget, which was presented a day earlier.
“Though markets did react negatively to the budget, you can put most of the blame of Tuesday’s crash on China, which triggered heavy foreign institutional investor outflows,” Deven Choksey, of KR Choksey Shares and Securities, was quoted as saying.
If nothing else, the global drop this week underscored the herd mentality that seems to dominate the markets.
Fund managers often look at the region as a whole and move in and out sometimes with little regard for the individual strengths or weaknesses of individual markets. On Wednesday in India, the Bombay Stock Exchange dropped 4.01% and the National Stock Exchange’s Nifty index lost 148.6 points to close at 3,745.
Talk of China’s stock markets was actually a bit of a change of pace in India, though. The Indian on the street prefers to complain about floods of cheap Chinese goods while the big-business types look at the opportunities inherent in the growing relationship between the two countries.
There is no one to fault for the ups and downs of the market – at least no one that can be held to account. Nevertheless, the drop did little to endear China to the average Indian, who has little trust, or love, for the Asian neighbor.
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