Financial meltdown deepens as world economy is in the grip of recession led uncertainty

Financial markets across the world are facing meltdown trend for the second consecutive day. Global opener Japan’s Nikkei index falling by more than 5% and Japan had a holiday yesterday. Other market later on the day is expected to join Nikkie’s downward scoop is the Chinese market where also yesterday a holiday was.

What Japanese market is showing today is the felling of the global market yesterday.

But overall, the present trend is shows financial markets were abandoned by investors amidst rising feeling that companies cannot get profit amidst declining demand and falling commodity prices.

The turning point came when US Fed Reserve’s Chairperson Janet Yellen has made a statement to the Congress that the US economy is in a difficult situation. So far, markets were anticipating an interest rate policy tightening policy from Ms Yellen.

Investors are avoiding stocks to embrace gold and as a result, gold price has gone by 15% for the last few days. In the coming days also gold may record a rally against dollar. A return or a positive turnaround in world economy is difficult to come by in the coming days.

The India stock market also followed the global trend but has an additional reason of adjusting to the NPA in the banking sector. India is expected to be less influenced by global meltdown because of better macros but the problems in the banking sector is creating market volatility in the last few days.