Though the Sensex managed to close the week ended on Friday with a gain of, 6.19% or 893.73 points, still the Indian stock markets have lagged behind when compared to its Asian peers in terms of recovery from the recent crash. Since August 17, 2007, when the US Federal Reserve slashed its discount rate by 50 bps to infuse fresh liquidity into the system and restore investors? confidence, the Indian market could gain only 8.32%. On the other hand, the Hang Seng index of the Hong Kong Stock Exchange has surged 17.64%, Seoul Composite 14.35%, Jakarta Composite 14.96%, Shanghai Composite 12.07%, Taiwan Weighted 11.02% and Nikkei 225 8.48% during the same period.
Amitabh Chakraborty, president-equity, Religare Securities, said, ?Unlike Asian markets, the Indian markets had an extra dimensional factor in the form of political crisis which had a dampening impact on recovery of our equity market.?
Though there is a consensus view among the market players about the political factor that had held back recovery of Indian market, Deven Choksy, MD, KR Choksy Securities, says, ?The fundamental difference between the Indian market when compared to other Asian market is its highly developed derivatives futures market which is cash-settled. The institutional investors mainly participate in it. Though this type of investment by foreign players (in derivatives segment) provide good liquidity, most of the times it acts road block in the recovery path.?