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It is as much bad news for the Indian economy as it is for others, with economists cutting growth forecasts for the country, as the global financial downturn takes hold. Until recently India was confidently asserting that its mainly inward-looking economy and vast domestic market of 1.1 billion people would allow it to ride out turmoil stemming from the US-bred subprime crisis. But Asia’s third-largest economy has joined the ranks of the wounded, with the odds of it emerging comparatively unscathed now significantly reduced as companies worry over their earnings. Goldman Sachs has cut its growth forecast for India to 6.7 percent – among the lowest so far – and said it expected the economy to expand by just 5.8 percent next year. Mansoor Darvash, 48, has a shop near the Bombay Stock Exchange, the oldest stock exchange in India. He invested nearly $4,000 in stocks last year hoping that he would make much more and use the money for his daughter’s wedding. However, with the ongoing slump in the Indian markets, not only has the value of his investment come down to a mere $1,200 but he has also had to borrow money from family and friends to go ahead with the wedding.
Darvash has seen the exchange’s benchmark stock index, popularly called the Sensex, rise from 1,000 points, cross the magical 20,000 points and sink to far below 10,000 points. He remembers brokers letting balloons in the sky when the Sensex crossed 5,000 points. But the nostalgia is soon replaced by disappointment. “I have many broker friends but I have always invested small amounts. Last year I was preparing for my daughter’s marriage and the market was doing very well. So I put a lot of my savings and it just kept going down after that,” he said. “Now I just want to recover my basic investment. I don’t think I will invest again.” An investor can choose to buy or sell stocks of more than 4,700 companies listed on the Bombay Stock Exchange, a 133-year-old institution. However, of late, the busy road housing the stock exchange has been quiet as the Sensex has slid. Located in the busy commercial area of the city, the exchange has a crowd of investors and bystanders watching the exchange screen all day. Bimalkumar Agarwal, Rakesh Jain and Harish Kapoor meet near the exchange everyday. They are a part of the “never say die” spirit of Mumbai and its stock markets. “This is a good time to buy. Markets will recover. It will take time but it will,” says Agarwal. They discuss everything from global oil prices, inflation and the US economy. “Investing in the market is such an addiction that a real investor can never leave it. It is down now and everyone is worried. But if I had any extra cash I would have invested right away,” insists Mr Kapoor. The three investor friends also insist that most people have made more money in stocks than through any other investments. Analysts say investors, like Darvash, who put all their eggs in one basket and needed the funds at this time, are worst hit. Ashok Kumar Bakliwa of a Mumbai shareholders’ association says the hype of the Sensex touching 21,000 earlier this year resulted in a lot of speculative buying. Mukund Kulkarni, who runs a stock broking agency, says it is important not to panic. “This is a time for long term investment. We are advising investors to choose carefully and invest. It will take time but markets will go up. The Indian economic situation is good and it will improve from here.” Indian stocks have lost more than 50% of their value this year. Though market experts insist that the situation will improve slowly in the next few years, not many investors want to take the risk. 
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