Black Monday: Will Global market meltdown?

China is taking every step to recover from the economic crisis however its stock market is depleting with every step. If the economic powerhouse China suffers from economic turmoil, that is bound to affect global demand. The world seems to be in danger to experience economic crisis such as those in 2007.

It has been a while since long we have not seen high magnitude correction in our equity markets. This fall has largely been in reaction to the global markets butchering, the second effect of which has been a weaker rupee. Global markets have crashed continuously for the past couple of weeks due to concerns over China's law of economic growth as its consumption story falters. This is in addition to other burdens such as Europe’s pain and a general slowdown in economies across the globe. The US rebound story also is still incomplete.

India’s rupee fell past 66 per dollar for the first time in two years and sovereign bonds dropped as the fallout of China’s yuan devaluation and concern a U.S. interest-rate rise is imminent fueled an emerging market selloff. The rupee registered Asia’s worst performance after the Malaysian currency ringgit during a regional currency slump Monday.

The worsening comes as a global selloff in riskier assets deepens, arouse the biggest retreat in Asian shares since 2011 and emerging-market currencies to record lows. Caution is mounting following China’s devaluation of the yuan this month and signs of weakness in the nation’s economy, a growth engine for the region.

Brent and U.S. crude oil futures hit fresh 6-1/2-year lows on Monday. The Net Importer of oil, India can benefit more, cheap energy cost will also boost the India's profitability in coming days.

In such markets, the Indian economy still remains a bright spot. Of course, low commodity prices are good for India but a global slowdown is not. Today is a Black Monday after a long, but it is also a buying opportunity. The Indian market may well be first off the block in recovering from this fall. It is time to look for bargains in high quality stocks.