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Many Asian stock markets have been violently shaken up in recent times. At first the Indian markets seemed to faring better than the others. But of late the Indian markets too seem to be finally showing signs of buckling under pressure. 

It may still be too early to write the epitaph for the  bull run that started way back in June,2003 and kept rolling forward, juggernaut like. After a vertical rise from the 4200 points level to an all-time high of 14,700 points in February this year, the Sensex  has dipped to around 12,600 within one month. 

The only serious and somewhat sustained aberration during the last four years came in May last year when the markets nose-dived by 3000 odd points before re-couping handsomely within a couple of months . 

With the quarterly results season round the corner, there is a flicker of hope that if the results are better than expected - as happened with the third quarter - it might help stem the ebbing market tide.

Among the sectors expected to declare good results, information technology and healthcare rank high, while the feeling is that sugar and auto companies could be  under-performers on account of the dark political and business clouds hovering over their horizons. 

The last and final hope, as always in the Indian context, remains divine intervention. Ours still being an economy where the fortunes of the agricultural sector have a multiplier effect, the importance of a good monsoon cannot be over-stressed. 

Here too, the law of averages seems to be working against the probability of a bumper monsoon of the kind that has propelled the Indian economy over the last few years.

Against that backdrop, the Indian economy had raised its GDP growth beyond 8 per cent for the first time in 2003, and by December2003 foreign fund inflows had begun to surge. Now, however, 8 per cent has become par for the course and a dip too far below that level could have reverse repercussions.

Does all this mean that the party at the Indian bourses, which has lasted four full years, barring one dark Monday in May 2004, is finally over ? Perhaps not as yet.

After all, even with a downward revision of its GDP growth projection to 7 per cent, the Indian economy will remain one of the faster growing economies. Also, although the pace of economic liberalisation leaves a lot to be desired, its direction clearly is irreversible.

Finally, the best case that can be made against a free fall of the Indian key indices ( BSE Sensex and NSE Nifty ) is the fact that once the markets dip to a certain level, value-buying of the kind witnessed in July last year could commence and stem the tide.

When and at what index level that will happen, however, remains the million dollar question.     

(Ashok Kumar heads LOTUS KNOWLWEALTH and can be contacted at
ceolotus@hotmail.com)