The equity, currency, and commodity markets in view of the US recession

by khalid on 02/10/2011 · 3 comments

The bearish trend of the markets in the present scenario will depend on the impact of the recession that has hit the United States. In case the recession goes to the extremes of the Lehman sort of scenario then a sharp sell off is on the cards. Looking at the impact on the Indian Equity markets we already know that currency movements play a critical role.

Eighty percent of the declines in the markets have come due to currency where people start unwinding anything in order to be safe against the risk of the currency movements.

Liquidity is the key for the Indian markets which contribute on a large scale by global investors the FII’s. If opportunities seem to grow in terms of capital gains it is for sure Indian markets is going to draw up fresh set of capital from abroad. Equity markets have come down substantially over the last quarter in the Indian Markets. To follow the decline in the equity markets was the currency. Commodities were the ones which have been correcting for a while and may still continue to do so until a reasonable bottom is achieved. With a further decline in the commodity prices the inflammatory pressure is set to reduce in all the major developed markets.

Bell the Bull says: With the severity of the US recession the markets are set to react. With time passing and the impact getting reduced Asian markets can be a profitable option for the people abroad for maximising their growth propositions for their investments. 

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