‘There was no conviction and almost no buying in the Indian markets because at the moment all macroeconomic factors around the world are negative,’ said Jagannadham Thunuguntla, head of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC Group.

1. No positive cues, Indian markets outlook grim, say analysts
Posted: 8:53p.m IST, September 29, 2008
New Delhi, Sep 29 (IANS) The outlook for the Indian equities markets remained grim as there
are no positive global or domestic factors in sight, analysts said Monday.
Indian equities markets ended deep in the red Monday on all-round nervousness following the
US financial contagion spreading to Britain and mainland Europe, and the US Congress
announcing a much diluted version of a $700 billion bailout plan, analysts said.
‘There was no conviction and almost no buying in the Indian markets because at the moment all
macroeconomic factors around the world are negative,’ said Jagannadham Thunuguntla, head
of the capital markets arm of India’s fourth largest share brokerage firm, the Delhi-based SMC
Group.
‘There is an element of uncertainty, which is causing all the selling and almost no buying,’
confirmed Naresh Pachisia, managing director of eastern India’s leading distributor of financial
products and financial services firm, the Kolkata-based SKP Securities.
‘The slowdown in industry in India is a reality and there are clear signs of slowdown if not a
recession in most global markets as well, so there are almost no positive cues,’ Pachisia said.
For example, a developed economy like New Zealand’s has for the first time in 10 years has
reported negative gross domestic product growth of 0.25 percent.
Thunuguntla stressed that for the first time in more than half a century, the US debt to gross
domestic product (GDP) ratio has touched 70 percent.
‘The last time this figure was reached was in 1954 when the US was trying to meet the expenses
of the Second World War,’ he said.
‘Today the per capita US debt, that means what each US citizen owes, is $37,000, while their per
capita income is $50,233, which again confirms the 70 percent-plus debt-to-income ratio.’
Again for the first time in 25 years, the US annual budget deficit will touch $1 trillion or 7
percent of its GDP, double of last year’s $500 billion or the usual average of 2.5-3.5 percent,
Thunuguntla said.
The last time the US budget deficit touched 6 percent of the GDP was in 1983 when the US was
locked in a Cold War with the Soviet Union, he said.

2. Thunuguntla also said European central banks are giving a lot more support to troubled
European banks and financial institutions than the US government.
‘The weak US support to its financial system is another cause for worry since the real problem is
in the US and unless something is done to add liquidity to the US system, there is no chance of
any genuine recovery,’ he said.
‘Indians have at last begun to realise that we are very much a part of the global system and we
have become fully integrated,’ he said, adding: ‘The claim that we are insulated is now passé’
‘For example, in the US, which is the epicentre of the current crisis, markets have fallen about 22
percent since its last peak at the end of last year, but Indian markets have fallen by double that
figure - by 45 percent since last December when the Sensex touched its peak of 21,000,’ he said.
‘This is a clear sign we are not insulated any more and our domestic market maybe large but as
an economy we are now very much linked to the global economy in various ways.’