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Stock Market, Capital Market and Money Market

Stock Market, Capital Market and Money Market A Mid-Year Analysis H T Parekh IN the first half of 1982, the financial and monetary scene has transformed itself beyond recognition from what it was in 1981. The euphoria caused by inflation psychosis has gone. The stock market community is in the grip of a crisis and is paying dearly for its excesses. The impact of this is also being felt sharply by the new issues market, where the phenomenal burst of activity of 1981 has much subsided. No longer is it easy to raise new capital, though, overall, the market can be said to have broadened a great deal. In the money market, the constraint on resources has eased considerably for the banks. Pressure on them from the Reserve Bank on the one hand and for credit from their clients on the other has relaxed far beyond anyone's expectations. In industry and trade, a sellers' market is turning into a buyers' market making it difficult to pass on cost increases to the consumer. This is a new experience for the stock, capital, money and commodity markets. The painful process of downward adjustment is going on, the end of which may not yet be in sight.

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