The fear of recession looming over the markets - Review
1. Why have the stock markets corrected sharply recently? 2. How have Indian equity markets performed vis-a-vis other global markets? 3. How is the Indian economy positioned in the face of global uncertainties? 4. What is the outlook for Indian equity markets going ahead? 5. What is the recommended investment strategy for long-term equity investors? 1. Why have the stock markets corrected sharply recently? The sudden and sharp decline in domestic equities is in line with the secular weakness in global equity markets over the last few days, fearing the impact of a probable recession in the US triggered by weaknesses in the housing markets and the subprime mortgage crises there. The magnitude of the recession fears can be gauged by the fact that global markets remained sharply negative despite the record and unexpected rate cut (75 bps) by the US Federal Reserve yesterday. Indian equity markets witnessed significant FII (Foreign Institutional Investors) outflows of c USD 3 B over the las