Impact of US Slowdown on the Economic Growth of India
BSE SENSEX closed Monday 11th Feb’08 at 16,630.91. SENSEX experienced a new lifetime high of 21207 and a low of 15332 during Jan’08. Indian investors were very highly leveraged on their `long positions’ in Jan’08.
This savage fall in SENSEX and NIFTY in a subject of three trading sessions – 18th, 21st and 22nd Jan’08 took the `speculators’ by surprise in the Indian equity markets. The fall was so steep that said operators could not `square off’ their long positions in time. There were some `systemic’ shortcomings in the Indian equity markets which lead to this situation wherein the brokers `squared off’ the client’s long positions as the `margin calls’ got triggered in the fall. US Fed moved in on 22nd Jan’08 with an aggressive `Fed Funds’ interest rate cut of 75 bps to 3.50 % in order to arrest the further fall of ^ DJI. This is the biggest interest cut in more than 23 years by US Fed. Ben also cut the `Discount Rate’ by 75 bps to 4.0 %. The ^DJI recovered and so did global equity markets. In fact SENSEX recorded its single highest daily gain of 1140 pts on 25th Jan’08.
Moreover, The financial shock as experienced by the US subprime market has sent ripples globally. In such a situation it is important to analyse the impact of the US slowdown on the economic growth of India. Market volatility and the US sub-prime mortgage crisis has sparked deep financial concern for the world’s largest economy. The Structured Investment Vehicles, Leveraged Buyouts, Collateralised Debt Obligations and Asset Backed Commercial Papers, all suffered a financial crisis in US. Consequently the labour market in US has been adversely affected and there is also a fall in the investor’s confidence. Indian Economy is least affected by slowdown in US subprime market. Though rupee appreciation is regarded as a threat to India’s economic growth due to falling exports, still an economy with a better spending driven base will follow a path of furter growth.
A Solar Return has effect from birthday to birthday, so this chart operates from 4 July 2008 to 3 July 2009. The USA SR Ascendant at 210 Gemini conjunct the USA Mars. Americans (Ascendant) will be very angry (Mars). The SR Mars at 10 Leo is conjunct with the SR Saturn at 50 Leo in the SR 4th house. U.S. families (4th house) will be under extreme pressure (Mars Saturn), and many of them will still be losing sons on the battlefield. The USA SR Neptune at 230 Aquarius is in conjunction with the SR 10th house. The USA self-confidence is at low ebb. More lies (Neptune) from a government (10th house) “out of control” (Neptune). While the latter period of 2008 will bring the greatest difficulty this year, we are witnessing the beginning of a downward trend. Hand braking this is the positive Jupiter Saturn trine, which doesn’t leave until November 2008. And for that reason it could be more of a slow motion derailment to begin with.
Here Ganesha says that the actual timing of market correction had been started with the retrogration of Saturn in Leo with 14:35:30 degrees. Moreover Sun in Capricorn supported in hitting the market. The transit of Mercury should not be forgotten. The position of Mars in Gemini with 00:44:44 played a vital role. These planetary forces generally denote bearish trends of high level of scale in the markets. Mars is considered as a Bullish Planet. However Gemini is the sign of Bearish trend. In direct motion after retrogression, if Mars is located in Gemini, it registers a Bearish trend.
The high level of Volatility seems during February 20, 2008 to February 25, 2008. The main reason of these big electrical waves is Sun-Saturn opposition and direct motion of Mercury after retrogression. Ganesha foresees that after completing February, Market may have stability at the level of 19,300. During the next two months after February, market may have Bullish attitude but not strong, feels Ganesha.
Ganesha’s wishes are with all the investors and shareholders.
With Ganesha’s Grace,