Shares in India also dropped dramatically because they are in fear of a US recession. This started a temporary shutdown of the country's flagship stock exchange in Mumbai (Bombay). Early Tuesday morning, (1/22), the Mumbai stock index fell 9.8% and this caused the software-automated stop that ceased all trading. The site was one of complete chaos, the traders were in complete pandemonium. Although the Mumbai stock index capped an alltime high at 21,000 points on January 8, 2008, nearly $350 billion has been wiped out over the past six trading sessions. The US in one of India's major trading partners and it is India's biggest importer of IT sevices, and this is why investors are starting to pull out because if the US experiences a recession this will tramatically affect India's investors. However, on the flip side, there are investors who are saying that the fears of these investors are being overdone and there is more opportunity for new investors because so many other investors are pulling out before anything is even occuring. A finance minister was brought in to tell the investors to remain calm in order to restore some stability to the trading post. Many of the elite believe that India will not suffer if the US goes into a recession, at least that is what they are telling the investors in order to get them to remain calm, they have even reassured them that if something was to happen the Reserve Bank and all other banks in India will give enough liquidity to brokers and market players.
I think that the investors are doing the right thing by pulling out if they think the US economy is about to go into a recession. It goes with the old saying "better safe than sorry"
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