Suffering continues as foreigners withdraw investments

Author: Neha Dhemija

Investors hold varied opinions as to what triggered the financial avalanche. Some of the investors feel that Indian fundamentals are stronger than that of other markets; whereas some others put the blame on emerging economies for the fiasco. A few of the Indian investors feel that the panic state initiated in developed nations had its effects on Indian market, and fell really heavy on many pockets. Finance Minister, P Chidambaram amongst all this tried to pacify the scene by asking investors to banish fear.

Developing nations’ opined that their banks lack exposure to toxic securities that are the cause of the mess. Brazilian President said that it is unfair for the developed nations to blame the emerging lot, when they already have suffered and were only recently improving.
	Many of the stocks that were a part of emerging markets fell more abruptly in regions like Asia and Russia than the ones in Western Europe or U.S, for that matter. The reason analysts have uncovered for this is the dying of desire in these investors to take risks, any more. However, pumping of funds from them for a period of four years was responsible for infusing growth in them. So, sudden withdrawal has sent stocks to nosedive. Particularly mentionable point is the repaying of debts by much leveraged hedge funds. This in turn led other investments to follow the trend and the source pool suddenly appeared drying.