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Expect more volatility in the market

business Updated: Mar 14, 2011 01:56 IST
Sachin Dave
Sachin Dave
Hindustan Times
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Brace for more volatility ahead in stock markets as the devastating impact of the Japanese earthquake and tsunami sink in on investors and traders already roiled by concerns over the Libyan crisis that threatens crude prices.

Though the benchmark Sensex of the Bombay Stock Exchange lost 200 points quickly as the first news came in on Friday, the real economic details of the disaster are coming in only now. With trade with Japan worth $10 billion in 2009-10, the event could cause concerns for many Indian companies. As much as $126 billion of foreign direct investment (FDI) from Japan is riding on Indian ventures. Japan has described the disaster as the country's biggest crisis since World War II.

"The situation in Japan is a serious concern as it directly impacts all major global economies including India's. The market will remain volatile for two to three days, trying to gauge the impact of the earthquake," said Alex Mathew, head of research, Geojit Securities.

"In the short-term, delivery of goods in transit will be affected and that would also have impact on payments of the exporters," the president of the Federation of Indian Export Organisations Ramu S Deora told PTI. http://www.hindustantimes.com/Images/HTEditImages/Images/14_03_11_business.23b.jpg

Analysts say Japanese steel and pharma firms are in talks with Indian counterparts for joint ventures or buyouts, and the quake might result in deals being postponed.