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Stock Markets are the ready reckoners for feeling the pulse of the economy of any nation. America as the super power for years together after the Second World War, is predominantly wielding the strength of its economy to lead other countries of Europe and Asian sub-continents. The impact of U.S. economical ups and downs have a great impact on the economy of many countries, particularly the developing countries like India, China and the South East Asian countries of Singapore, Thailand, Malaysia, Indonesia and Philippines.
While the real reason for the ups and downs of any Stock Market is a moot point for researchers, a tangible answer to this million dollar question is still elusive. But the common factor acceptable to everybody is that if the economy is stable there are no wild fluctuations in the Stock Markets. A fine example for this theory is London Stock Exchange where there are no apparent flutters as the British economy being stable for long years. Considering the Stock Markets of India, China and the South East Asian countries, the volatility of the stocks’ prices is more visible and frequent. As far as India is concerned there has been a steady growth in the economy in the last couple of years. Political stability, policy decisions and financial reforms in encouraging global competition in the Indian trade and commerce can be safely adduced as the reasons for the economical growth and thereby a steady upsurge of the Sensex – the share price index of blue chip companies in India as expressed in the Mumbai Stock Exchange. It is true that there were corrections in the Sensex figures time and again over the last two years, but overall the fact remains that the Sensex Index is “Bullish” from 6000 points in January 2006 to touching 20,000 points in October 2007. The fluctuations that happen are only in between 18000 to 20000 which are far away from the lowly figure of 6000 in 2006. Experts in the economical field attribute the growth in value of the shares to FIIs – Foreign Institutional Investors diverting their funds into Indian Stock Market. Investors world over have only one common objective that is getting good returns on their money invested. They watch all the Stock Markets keenly and wherever there is bright opportunity, they do not mind diverting their funds, which they can withdraw at any time. Here again, the downward trend in the U.S. economy and the real estate market being sluggish pushing down the interest rates has an impact over the Stock Market fluctuations of Asian and South East Asian countries. Considering the Chinese Stock Market, this nation is the most populous one, freed from the clutches of iron-clad policies of the Communist regime and is marching towards modernization and self sufficiency of all the needs of people. Observers feel by 2050, India and China will be the Super Powers of the world judging from the way the economical growth is taking place in these two countries. Foreign investment is flowing into the Chinese Stock Market also and despite corrections experienced here and there, the CSI is showing a healthy “Bullish” trend. As far the South East Asian countries their Stock Markets are mirroring the ups and downs of U.S. economy as U.S. dollar is the acceptable currency of trading transactions mostly. The growth of share prices in these markets is commendable in the recent years.
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