Sensex crash: Is it sign of global economic slowdown?

Mumbai: Investors lost money to the tune of Rs 3 lakh crore on Thursday when the BSE Sensex crashed 643 points. They say volatility has creeped in, and the markets are “dangerously uncertain”. But is the worst over yet?

Some market men are of view that it’s “correction” that was long overdue. Market regulator SEBI's Chief M Damodaran however reassures that people should not worry too much about Thursday’s crash despite it being the second largest single-day fall on the Sensex.

New York's Dow Jones Index had plunged 167 points after reports that the biggest mortgage lender in the US may be facing bankruptcy.

“The risk potential that people had before this fall is definitely going to come down now. Also, there could be a big squeeze in liquidity which will not revert for at least next 2-3 months,” said analyst Vibhav Kapoor.

But the question on retail investors' mind is whether the markets will fall further? Brokers say that there is room for some more blood shed but they also believe that India's strong economic fundamentals will see the domestic markets through

“India is an interesting country. There might be a sign of strength because its one country where the domestic demand story really is very strong,” said Robert Horrocks of Hong Kong firm Mirae Asset Global Investment Management.

Volatility in the markets is expected to continue, at least till the mess in the US home loan market is cleaned up. International rating agencies like Standard And Poor’s do not expect the mess to spill over into emerging economies.

10 biggest one-day losses of Sensex
May 18, 2006		826 points
Aug 16, 2007		642.70 points
Apr 2, 2007		616.73 points
Aug 1, 2007		615.22 points
Apr 28, 1992		570 points
May 17, 2004		564.71 points
July 27, 2007		541.74 points
Feb 28, 2007		540.74 points
May 15, 2006		463 points
May 22, 2006		457 points