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Global fears of another recession – Sensex drop proves Hindenburg Omen might come true

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The fears of another big and bad recession due to US economic turmoil are spreading across the globe like a plague. This global fear has already struck nightmares to the stock markets with the Sensex yesterday slipping 387 points to close at 17306, a 12 month low. Investors seemed to be struck in panic as they sold stocks from all sectors. Real estate and automobile sectors were the worst hit.

The low rate of economic growth in the US has given birth to the concerns of another big recession. The global investors, as a result, are found to try and sell as much as possible in the current state to reduce the risk of incurring losses.

In India, on the other hand, the continuously rising rate of inflation and high interest rates has made investments difficult. This has made to overselling in the market and all sectors, – from real estate to capital goods, financial services to automobile goods have suffered.

Since the IT industry of India largely depends on the US, a US recession is bound to affect almost all IT companies of India. If the US fails to clear off the debts and another recession starts off, the Indian IT and ITES industry would be taking a big blow. With the dollar value depreciating already and companies still in the process of making revivals post the last recession, newer measures of cost-cutting initiatives are expected in the Indian corporate sector. However for the IT companies who have shifted their focus to Europe post the last recession may not worry right away.

Mentionable that a renowned American analyst Jin Miekka, who is credited with making several accurate market-linked forecasts earlier, had predicted a crash in the US Economy long ago. Miekka had predicted the meltdown to be in September of this year. This crash prediction was named after ‘Hindenburg Omen’ — named after an ill-fated German plane that crashed in 1937. After this shocking forecasting report based on a study of technical trends, clouds of fear had swapped through the entire US market. However, analysts in India had laughed off the report stating that it is far from the shores.

However, yesterday’s Sensex drop has just brought back the fears that the Hindenburg Omen might come true.

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Global fears of another recession – Sensex drop proves Hindenburg Omen might come true

By: S Kumar Deka Read time: 6 min