Inflation came down 11.44% from 11.80 reports CNBC. Now if you see the inflation, pace at which it is decreasing indicates slowing down in the demand. Main causes for this are Crude oil price which is now hovering at $ 70 per barrel, fear of recession, which leads to savings rather than spending and base effect.
Because of recession fear yesterday Dow Jones fell 730 points that is nearly 7-8% due to which Asian Giants like Nikkei fell 10%, Hang Sang 6% and our market is on the verge of breaking the major psychological support of 10000 even after yesterday’s CRR cut from 7.5 to 6.5%.
Our market is almost at the bottom or nearer to it as experts feels that, when market neglect many positive news and continue sliding south indicates the bottom. But investors must be careful in the bottom fishing.
Now I think immediately RBI and SEBI should act. RBI should reduce Repo rate and overall interest which also impacts the call money rate. As Keynesian theory states when government should pump the money into the market in the time of crisis like this through banks.
And SEBI should ban the short selling for temporarily. Since everywhere negative news is coming and traders or even investors look for short position in the market.
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