India is witnessing a fall all around from the stock market to currency value. The only thing that is showing some strength in the market is Inflation. Even theory of relativity fails when it comes to pulling down the Inflation in India. Crude price has recently shown some weakness as the price of Brent has come down from 124$ to 109$, but the depreciated INR has squared off the benefit of any price easing. With biting inflation, the purchasing power of investors is also diminishing. The falling stock market seems expensive to the investors now. This is a bizarre situation for the stock investors as they can't stay in cash because inflation will eat the idle money, and if they invest it then the risk of loss is very high.
Due to funding problem in Euro zone, both external commercial borrowing by Indian corporate and trade credit fell significantly in last few months. While this deterioration of the capital account shows the global funding problems, it is being driven even more byRead More »from Stock and INR dooms: Will Somebody Tame the Bear?