News

Indian Stock Markets Plunge on Worries Over World's Financial System

Multimedia

Audio

Indian stock markets have plunged sharply as worries about the global financial systems rock the world.  Anjana Pasricha reports from New Delhi, the Indian market was among the hardest hit in Asia.   

The Mumbai Stock Index, the Sensex, tumbled soon after trading opened, but recovered somewhat by the end of the day  The Sensex closed at 13,531, 469 points lower, a loss of about 3.5 percent.

The trigger for the falling markets in India, as elsewhere, was the financial turmoil gripping international investment firms in the United States.  Lehman Brothers is filing for bankruptcy and Bank of America has announced it will acquire Merrill Lynch.

Analysts say fears are growing the financial turbulence could spread to Asia.  Vice chairman at Indian domestic rating agency ICRA, P.K. Choudhury, says there is a lot of  apprehension among investors.  

"There is a feeling that what we are seeing is the proverbial tip of the iceberg, so one does not know what are the things which are going to come out," said Choudhury.

Monday's losses were the latest to hit a market that has been battered since the start of the year.  The Mumbai stock index has lost more than 30 percent of its value since it traded at a peak of more than 21,000 points in January. 

Analysts cite several reasons for the downturn in the Indian stock market.

The high economic growth witnessed in recent years is expected to slow, inflation has been running at more than 12 percent, and the Central Bank has raised interest rates, dampening consumer demand.  That has led to fears that Indian companies will post lower profits this year.  

Foreign investors, who had helped drive the market up in recent years, have pulled nearly $8 billion out of the market as they sell off riskier assets all over the world.

Choudhury of ICRA says investors are likely to be cautious for some time.  

"All over the world, there is a lot of uncertainty, a lot of apprehension that economic growth, development, demand are not likely to go up substantially," added Choudhury.  "So the bearish tendency we are seeing now is getting aggravated in the process."

The Indian economy, which is among the world's fastest growing, has been expanding at more than eight percent for the past three years.

 

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs