Impact of Global Factors on Indian

Financial Market
Joseph Anbarasu
 Local Financial System

Domestic
Various Domestic
Surplus Vehicle
Players Deficit Units
Units
• Individuals • Domestic • Traditional • Individuals
• Firms Players Instruments like • Firms
• Organizations • Government Equity & Bonds • Organizations
Presence
 Global Financial System
Visible among Nations

Global Global Global

Innovative
Surplus Financial Deficit
Vehicles
Units System Units
• Individuals, • Money Market • Equity • Individuals,
Firms, • Debt Market • Bonds Firms,
Governments • Equity Market • Hybrid Governments
• Derivative • Money Market
Market Instruments
• Forex Market • All are
customized
 Global Financial System
Risk Involved
Global Global Global
Innovative
Surplus Financial Deficit
Vehicles
Units System Units
• Greedy • Withdrawal of • Poorly backed • Dwindling
• Crowd Attitude FDI and FIIs securities Market trends
• Operation on • Tall promises • Obsolescence
chaos and claims • Yielding to the
• Poor • Not all are rated global pressures
Government with prudential • Manipulating
regulation and principles the quarterly
monitoring results
• Functioning not • Poor Corporate
on sound Governance
fundamentals
Recent Financial Crisis on Indian
Financial Market
•Global Liquidity •Mutual Fund Industries
Squeeze ‘ under pressure to
•Downward Pressure on redemption of units
Rupee

Equity Debt
Market Market

Money Forex
Market Market
•Europe and US cut •Converting local fund
their exports into foreign currency
•Migrant workers ‘ to clear their debts
contribution Dwindling •RBI intervention to
protect Rupee value
Resistance of Indian Financial Market
to the Crisis
Oil prices down
by 30% helped
RBI, SEBI and
RBI’s non-
IRDA did hard
reformists
work to combat
approach
the Impact

RBI – tightening
Anti-liberal Financial up liquidity and
legislation Market raise in the
Interest rate
Economic Factors and Financial Market

Growth Young Savings Prudence

• Indian India Rate • RBI’s
Economy • 55% of the • Savings prudential
does not norms for Domestic
population rate is 35%
depend is below 25 and Market lending by Demand
Growth in years of is customer banks
the West age driven not
state
driven
 Word of Caution
• Even though India has
weathered the global
financial crisis better than
most other countries, a
meaningful recovery
depends on how quickly
some key economies turn
the corner
• Pranab Mukherjee
• We have to go a long way.
The journey won't be
easy," he said