The market action was predictably grim yesterday. The S&P/ASX 200 lost nearly two percent. It’s worth noting that India’s crash last week, in which the Sensex 30 dropped more than 7% — though it was related to regulatory measures — is exactly the kind of thing that can start a financial tsunami.
Trouble starts in emerging markets. Seen from afar, which feels like a safe distance, it’s just something unfortunate that happened to someone else in an emerging market. But the world’s financial markets are linked in obscure ways which only become apparent later. So we’ll be keeping our eyes open for evidence that what started in India might be part of something more ominous. Or not. We’ll see.
Speaking of India, it is “planning its largest ever auction of oil and gas exploration blocks and has set a tentative start date of mid-November to begin marketing the sale around the world,” according to Joe Leahy, who reports from Mumbai in today’s Australian.
“The long-awaited auction,” Leahy continues, “is a crucial part of India’s efforts to boost domestic oil production to keep pace with its rapidly growing economy and to help mitigate the growing burden of domestic fuel subsidies, which are set to rise by up to 70 per cent this year.” India imports close to 76 per cent of its oil and gas, according to the article.
Markets and Money