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Japan quake: Indian Share values enjoy comparative advantage over rest of Asia

  By : , Mumbai, India       18.4.2011         Phone:9226351476          Mail Now

When every nation in the world is weaved in with the thread of globalization, a disruption dissipates all across the globe. Japan, being the third largest economy in the world is sure to spread the effects of its devastation all around, especially in Asian economies. Disruptions in share value , observed in respective financial markets of Asian countries are the prompt indicators of economic disturbances. As well understood the towering tsunami and ravaging earthquake in Japan that weakened the nation had immediate impact on the share prices in countries like Singapore, China, Australia Korea and India. 

Being one of the emerging economies, Indian share values also got disrupted abnormally. Just after the disaster the Indian share market fell from its position of high benchmark value comprising 30 shares. The fall in share prices was so abrupt that Sensex dropped to 2 week intraday trading at low prices. While after the twin disaster, Japan is again stricken by the fear of nuclear meltdown, share markets of Asian nations are also reacting to this probable nuclear disaster. The series of nuclear blasts in Japanís nuke plant have witnessed Asian share values falling sharply. However, India financial market has stayed in a better position compared to the share market of the rest of Asia. A look at the trading volume and share prices in Sensex, explains how the share market has revived from the shambles of recent past. 

Whatsoever the real consequences are, but investors still remained wary of the natural disasters and the present nuclear meltdown in Japan. A cautionary note of the financial analyst in this regard makes it clear that impact of recent disaster over India will be limited. However, analysts didnít rule out the economic vulnerability completely as they can predict that India will be affected by the changes of global capital flow that will occur soon as a result of Japan disaster. Since Japan is not among the key trading partners of India direct impact of Japanís blighted economy wonít get reflected onto the share values in Sensex. However, there are companies in India which bank on imports of Japan largely. These firms will be affected and their share prices will get distorted due to delay in imports from Japan. 

Although we cannot rule out the effects of Japanís natural disaster over India, yet we can have a breath of relief for being safer than other Asian economies.

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