Worlds manufacturing sector dips down because of lower demand from the market and poor economic condition of countries. Manufacturing of euro zone fell to a 37 month low of 44 from 45.1 in June. Position of manufacturing sector is also not good in China, India’s manufacturing grows slowest pace since November.
Position of euro-zone nations is the worst. Now the investors who want to keep their money in safer place going to the emerging market as these markets are safer than the market of the developed nations.
I want to give the example of India. FIIs invest Rs.10.2K cr in July despite of High inflation, lack of policy initiative and weak Monsoon. As investors see India as one of the safest place for the long term investment as most of the problems of the market is coming because of the local policies.
I think strong policy reform and a big bailout amount will be required to take out the European nations from the crisis, where as emerging markets have to improve their economic policy & have to solve their local problem to increase the growth rate.