The India bourse, Sensex on 27 October 2008, when most people in Asia are calling this day a black Monday, Sensex fell as low as 7697.39 points as global recession fear deepened. It is a fall of more than 1000 points. The injuried or heavily battered stock prices had already made trillions of dollars vanished into thin air.
The price are now determined by buyers and fundamentals are no longer a factor in buying stocks anymore. Fund houses are believed to be off loading their stocks and retails are less willing to have anything to do with the stock markets now as many are still holding tightly to their paper losses.
Towards the closing of the trading session, Sensex pulled a recovery to end considerably flat with a drop of just 2.2 percent. From the chart of Sensex, Bombay or ^BSESN, buying started coming in at about 1 pm and towards the end, a "V Formation" was formed.
It is very resilent of Bombay market to react this way as the markets all over the world were seen with panic selling and it has been plainly overdone. As the market is oversold, even economic slow down will not caused the market to keep plunging. The new concern raised is the strengthening of yen which hurt export and brought Japan’s bourse Nikkei to 26-year low. This has a very bad impact on the economy and especially asia’s economy.
It is likely that governments of all major economies will put in more effort to prevent or rather reduce the harm of the world plunging into a depression. Short term wise, selling is way overdone, technical rally must ensue to close the loop of what goes down must indeed comes up.
The above are of personal opinion and not at all an inducement to trade.