Mumbai: The Indian and Chinese markets aren’t doing too badly, compared to what happened to the Dow and the carnage in the rest of Asia. At the time of writing, the Sensex is down 2.4%, while the Shanghai Composite has lost 1.9%. Most markets in Asia are down over 3%, with Jakarta losing over 5%.
Why are our markets so resilient? One reason is that we had already lost such a lot of ground in the last few days, after RBI dropped its 50 basis point hike bombshell. Between 25 July and 4 August the Sensex fell 6.2%, compared to a 0.9% rise for the Jakarta Composite. We’ll have to wait for the European markets to open to see whether there’s more downside.
The fears of a global recession have affected not only stocks but also commodities. The Reuters/Jefferies CRB commodity index fell 2.772% yesterday. That is being reflected in metals stocks, with the BSE Metals index down 3.8% at the time of writing. The fall in crude oil prices has however led to support for the oil marketing companies, with HPCL up 3.5% at the time of writing. IT stocks are also being hammered over concerns of a double dip downturn in the US.