We have reasons to worry, but not panic

The Wall Street meltdown is obviously bad news for the the Indian financial market and B schools. But how does the crisis impact the average Indian? In many small ways, Mumbaikars tell Speak Up, but not so that they are losing any sleep — yet.

Expert view
For now, we can breathe easy
We have already seen the impact of this Wall Street meltdown on corporations that are linked to the affected companies. Also, there are many companies that have high stakes in these companies. So it is a major issue for the stock market as the FII is pulling out money. And if the FII inflows to India slows down or stops it is a negative sign for India. The financial and the real estate sector will be affected in some ways.
Risk capital reduces when there is a crisis of any sort. But unlike some other countries, India does not stand that exposed. For now, the impact will be minimal. We need to watch how the crisis develops in the US. Currently, the view is that it won't last long and that this is a shallow recession.

In case deep recession hits the US, then we will be affected adversely. On the job front, the IT-enabled sector will be affected. But so far we haven't done a detailed or systematic study on this link between the US and India. More information will trickle in over the coming days, but we don't have much to worry about right now.
 —D K Joshi. Principal Economist, CRISIL

And here is the bad news
This crisis in the US will definitely have an impact on firms in the financial services space in India as well. People working across a range of ancillary industries including corporate hospitality, premium air travel, retail, high-end automotives, and real estate to name a few will also feel the pinch of this meltdown. The impact would be direct as we are talking about the failure of global investment banks, brokerage houses and insurers which pretty much control the banking sector and the investment market.

More stringent lending norms means that people will borrow less for personal consumption, new homes and other discretionary expenditure. Turbulent stock markets mean that people would be relatively averse to investing and would prefer safer havens including government bonds and fixed deposits. The IT sector especially in India will feel the hit because a number of them provide transaction processing and other back office support functions to Wall Street's key players, many of whom are bleeding today. We will probably see the full impact of this on Indian IT firms in the coming two quarters.

Hiring is on the freeze across the board right now and I see that trend continuing in the near future as well. This applies especially to I-banks and brokerage houses dealing with IPOs and other capital market functions. Recruitments too will become more selective and that too only at senior levels for some time to come. As I mentioned credit is harder to come by, people are less secure about their jobs and hence the real estate market is likely to slowdown as well. This would be welcome in India because it would allow for a correction in the real estate market which had inflated to exorbitant levels in the recent years.
—Karan Desai. Assistant Manager,
Outbound Investment Advisory, PricewaterhouseCoopers

Investments will be badly affected 
Lehman Brothers filing for bankruptcy and Merrill Lynch being bought out by the Bank of America will definitely have an impact on India, if not now, then in the long run. Certain companies will be showing low balance sheets. The investment market will be affected a lot, in the US as well as in India. In India, the general attitude of the stock market investor is to achieve a target assigned for the day.
There are other factors as well in India that will impact the markets. There is the political instability and inflation which is mercifully slowing down. At least 20 - 25 % of segment in India is already affected by the deflation of the market. Also people working with investment firms and banks have become so insecure that they will grab any job they can get.
 —Jayesh Joshi.
 Sub Broker, Mangal Keshav Securities

Foreign investments in India are going to fall sharply
Indian markets have a lot of foreign investors and if the American markets are down obviously then the flow of investments into India will be affected. The Sensex is already down and A group stocks have been affected the most. The value of investments is going down and I do not see any short-term recovery. In the long run, the markets will recover and that's why I might buy few shares at a time when I can afford them. Panicking and selling stocks isn’t the solution here. You will end up with pathetic returns and never find the courage to play the markets again. Look at the positive side. For one, oil prices are falling. This will reduce inflationary tendencies. Of course, since Rupee is also getting weaker the benefits will not reach us soon. But in time prices should come down considerably. The other good news is that realty rates will go down because a lot of these crashed investment banks were into that sector.
 —Manali Bhuva

Suddenly the IT job market is looking quite dull
This is definitely going to impact the finances of the entire world. The Indian market will also experience the ripples. Mostly it will have a negative impact on the IT/ITES service sector. Many companies in India might start laying off employees which in turn will de-shape the market further. I suspect that it will impact my job as well because I am in the outsourcing sector. I would prefer not to speculate in the stock market right now. I plan to play safe and avoid any risk. Of course, the markets will recover but how and when, I am not sure. It will take time as it is a serious set- back to the US economy which impacts markets all across the globe. Certainly for next few months will be crucial for the market, the buyers and the sellers. I invest in mutual funds but only to the extent that I can stay safe. I anticipate the value of my MFs dropping even further in the coming days. 
 —Garima Sahney

The markets are going to remain volatile for some time
I don't really see the Wall Street crash affecting me. In fact I see it help cool inflation numbers which can only be beneficial for me as an end-consumer. In the short run it might cause market fluctuation, also the liquidity crunch could lead to the Rupee devaluing further. I am a bit unsure about how the situation will impact India and want to look at the growth numbers before taking a decision about my investments. I would definitely encourage investment in the blue chips as they are available at some attractive prices. The markets will remain bearish for the next two months. It will take a year for the markets to return to sanity. I have invested in mututal funds, SIPs, ULIPs and standalone insurance. I see a negative return in the next three months. I have a five-year horizon on this so I don't really think I need to intervene at this stage.
 —Anand Shankarnarayan