Relation between us housing credit crisis and indian share market collapse?

Question

housing credit crisis

Answer 1

70% of US economy is consumer spending.  And US economy makes up 25% of the world economy.  When US consumers are in trouble and are likely to cut back on their spending.  Then all the countries that trade with USA are likely to loose a lot of that trade.   Which would be bad for their economies.  And India is one of those countries that depends a lot on trade with USA.

Investors in India are anticipating lower earnings by Indian companies due to decreased trade with USA.

Of course, high oil prices and high food prices also have a negative influence on stock prices of Indian companies.  Because these high prices cut profits Indian companies make.