market corrections: US slowdown or???

The sharp corrections in the capital markets world over during January 08 are attributed to the concerns over a possible US recession and its spill over to the global economies. By now there remains little doubt that US economy is headed for a steep decline. First it was the sub-prime mortgage crisis and credit card defaults, now huge losses by Citi group and Morgan Stanley. The signs are getting clearer as the days pass by. Few will argue that this seemingly imminent recession will have its implications on other economies, both developed and emerging. They will too bear the brunt of US slowdown, given the interconnectivity of global economies in this liberal era. But no one seems to be sure as to what extent a US recession will hit other economies. Particularly for India, analysts seem quite positive. Most of them believe India’s domestic consumption driven economy will sail through this turmoil. Some even thinks India will benefit from a US recession as more jobs will shift towards India. Here lies the contradiction as to then why India’s bourses took a greater plunge than Dow Jones on concerns of a US slowdown??According to financial market data provided by S & P, India was the fourth worst hit market during Jan08 with a correction of 16%. The loss was 12.44 for the emerging markets against 7.83% for the developed markets. 16 of the 26 emerging markets posted a double digit loss. Whereas the Dow Jones corrected by only 6.07%. This clearly indicates there is more to it than what meets the eye. Asian markets, it seems, are being played into the hands of western FIIs. Otherwise why would all asian markets rise and fall in rhythm? If the FII flows to India are at an all time high, so would be the withdrawls. It’s a natural cycle. So whether a US slowdown or not, markets will correct sharply in between scaling new highs. The 'Monkey business in village' story relates to the asian markets more now than ever.

India's thumpatic win against the aussies...

The win against australia on 10th Feb at the MCG established beyond doubt that India does have that potential to challenge the world champs on any kind of pitch. The fact that Sunday’s convincing win was after a long hiatus of 21 years on that ground is indicative of the strides Indian cricket has made. But then, talent has never been india’s problem. If one has observed properly, India has always had world class batsmen in its armory. Performance apart, Indian batting line up has always looked strong on paper. One would argue that I am looking at the wrong aspect wrt Sunday’s win. It was mainly due to some world class bowling by the India’s current pace trio Ishant, Pathan and srishant. Even harbhajan was quite tactful and showed some great cricketing sense. Ishant, in particular, has been in tremendous form throughout this Australia tour. He was instrumental in the perth test win where he scalped the wicket of inform Ricky Ponting in their second innings and set the tone for India’s win. I fully agree with this conclusion. I don’t want to take any credit away from this young yet tough breed of bowlers India has produced. Still I would say that batting is and will remain India’s stronghold for times to come. The main obstacle in way of India’s getting to top despite abundance of talent is their tendency to succumb under pressure. In my view India has had such solid batting strength as would make any target achievable on any kind of pitch or would consistently set 300+ target. But the same bunch has been found to get bundled out for less than even 150 quite often. It’s a common sight watching Indian batsmen finding it hard to play their natural game after India looses some early wickets. The consistent failure of the batting has put pressure on the bowlers to take the charge and often worked India’s way. But in the long run India will have to depend on its core strength. Since last so many years India has not been able to produce a single world class bowler. But many of its batsmen are among the top run grossers. Six or seven out of eleven would be having atleast one century in their name. even then it is not a coincidence that on one day they can chase mammoth targets but the next day they all r struggling at once. Indian cricket team surely needs mental toughening if they r to perform on a consistent basis. Had Ishant got nervous after being hit for 18 in that over or had Rohit or Dhoni crumbled when Australians were trying to make inroads after India lost 5 wickets, it would have been the same old story.
The professional cricket has evolved much. With the kind of cricket that the Australians are playing, you need to be physically and mentally very fit to push them from the top. Talent alone would not suffice at all.