Epaper
What a pity !! History was re-written in the early hours of Monday morning Indian time when JP Morgan agreed to buy Bear Stearns at $2 per share or USD 236 millions in what may be called a stunning collapse for one of the world’s largest and most popular investment banks. The stock was trading at $58 before the start of trading on Friday. This is definitely a set back to the investment world given the history of Bear Stearns. Now eyes shift to other global investment majors with Lehman Brothers expected to be the next target. Fed approved a cut to its lending rate to financial institutions to 3.25 percent from 3.50 percent, effective immediately, and created another lending facility for big investment banks to secure short-term loans.
Asian markets took a beating in the initial trades with Nikkei trading down 390 points at 11,851, its lowest in 4 years from April 2004. Japanese yen continued to kick US Dollar out of shape, currently trading at 97 yen, a 12 year low.
Bears cant get a better start than this. Indian markets are likely to witness hammering in the initial trades. Though the impact of Bear Stearns cannot be seen directly on the Indian Banking community, they might go down in sympathy. RBI is the only saviour to the markets in the next fortnight with a cut in interest rates. Markets likely to go down tamely by another 500-600 points. The Fed meeting on Tuesday (March 18) will decide the course of global markets. Watch out for stunning happenings across the globe. Let the pain get out before any gain.
