17 January, 2021

Swinging Like A Yo-Yo

Domestic factors -- high interest rates, high inflation, low earnings -- cause sharp volatility in the markets that could hurt small investors

Swinging Like A Yo-Yo
The Mercurial Markets
  • Sharp volatility in the markets will hurt, especially small investors
  • The current upheaval is mainly due to domestic factors like high interest rates, high inflation, low earnings
  • Fraudster Hasan Khan is said to have shipped out Rs 35,000 crore from the markets to Swiss banks
  • Authorities fear militant outfits may be manipulating the markets


There was a time, not too long ago, when the two indices, Sensex and Nifty, discounted the worst news and continued with their upward spiral. Not any more. Today, investors look at events with shock and awe. And they react with the same emotions. Says Sanjay Agarwal, director (financial services), KPMG, "Markets are usually resilient (during a bull run) but when they get overheated, they react in a magnified manner." This explains why the RBI’s move to hike interest rates on March 30 (Friday) led to a 600-plus fall in the Sensex when the markets opened...


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