Saturday, January 13, 2007

Market panic - Business line letter

My letter to the Hindu Business Line

Market panic

This refers to "Stock market panics when politics dominates economics," Business Line, June 15):

Structural inefficiencies, apparent reversal of pro-business policies by the Centre, spiralling oil prices, global tightening of liquidity and scarcity of easy money are some of the factors that the recent crash can be attributed to.

What was informative in the article was that most of the transactions occurring in the major two exchanges are speculative/intra-day/derivative trades.

Short-term investors, as they call themselves, are in fact traders or speculators. This recent correction might act as an antidote to the day-trading epidemic.
Kuppusamy Chellamuthu

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