Sensex at its Two Year Low!!

It was only the January this year when every one including the top analysts of financial markets have said that the Sensex will touch 25000 mark by the end of year 2008. But the markets almost fooling everyone not only did not move further but also touched its two year low by date.
What are the reasons behind this surprising behaviour of the Indian Financial Market? To me one reason is that Indian Retail Investors' being emotional decision makers. They overreact almost in every situation whether favourable or unfavourable. Another reason I sought, the most important and still overlooked by all, is the US Subprime Crisis. While it was proven that the 5 year long US Infrastructure spurt was a bubble and not a boom, Retail, as well as Institutional Investors kept on investing heavily in India (December, 07).
Another reason can be attributed to the fall in the margins of the Indian IT majors. This is very important to remember that IT companies play a great role in contributing to the foreing currency reserves of India. While, it were the IT companies who set this upward trend for the Sensex which was later caught by other industries too. And again with Indian Rupee Streangthening against US dollar with a signal of reccession in USA it were the Indian IT companies who started to be affected adversely at the first place.
But we missed to pay the attention it needed.
Well whatever be the reasons those who have booked losses can not go back in time. The only way to deal with this problem is to be more fundamentalist and less technicalist in nature. Only selection of fundamentally good securities and keeping it until good times come again with patience can benefit in long term.
For investors who still bag some money with them this is quite a nice time to invest in the Indian Market. The prices are very attractive and valuations are low enough. But again the quality of the stocks must be considered. And this is no good time for short term investing. Day Traders must keep them away from market at the moment untill it achieves some stability especially those with low turnovers.
Let's hope the good (atleast; if not the best at the moment) for the future and may this Diwali come with light for the Indian and Global Financial Market.