The consistency in inflation rates is worrying policy-makers
The stock markets are entering a gloomy second-half of 2011-12, notwithstanding a grim economic scenario globally. Is it a failure of the economic policy adopted by several nation states supporting their falling financial institutions? While this question is debatable among economists and policy-makers, the Indian conditions are peculiar compared to other developing nations, which have more exposure to developed markets while India is not. This statement goes with a caveat that India is not immune to global economic incidents.
The benchmark Bombay Stock Exchange (BSE) 30-share index, Sensex, recorded its biggest quarterly fall of 12.8 per cent as on September 30, 2011. Earlier, its biggest fall was recorded in the aftermath of the collapse of U.S.-based Lehman Brothers in September 2008, a 25 per cent downfall in the third quarter (October to December) in 2008. The Sensex closed at 16453.76 on September 30, 2011, against 19420.39 in April this year, a fall of 2966.63 points.
Meanwhile the rupee’s fall was sharper and it moved towards the range of 49.50-50 in September as compared to an average of 44.30 a dollar in April. In calendar year 2008, the average of rupee’s exchange rate was around 43.40 a dollar.
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