In the absence of positive cues indices across global markets put up a dismal performance. Fears of Inflation eating away at the wealth of nations have reached epidemic proportions.

What’s worse government across the globe are looking awfully helpless at dealing with the oil crisis that has led to a phenomenal increase in cost of living across the world. During the month the price of crude did fall momentarily after China increased the price of its domestic fuels. This led to speculation of demand being affected in the second largest market for oil. However, these concerns were soon brushed aside and the price of oil continued its ascent to new all time high prices. OPEC President Chakib Khelil was also reported to have said that oil may surge as high as $170 in near months on a European interest rate rise.

The month did witness intermittent rallies, but in the absence of sound fundamentals these rallies could not be sustained. For the second month in a row China and India’s frontline Indices posted the worst performance. The BSE Sensex lost 18 per cent during the month while China’s Shanghai Composite was worse off, plummeting as much as 20 per cent.

Technology stocks proved to be most resilient in most markets, while financial sector stocks were amongst the worst off. Mid month Citibank announced that it may be looking at further write offs in the forthcoming quarter. Furthermore, quarterly earnings from Lehman Brothers, Goldman Sachs and Morgan Stanley were poor compared to last year though they were better when compared to Wall Street's expectations. News of General Motors and Ford both being in trouble further pulled US markets down.

The outlook for markets across the world hinges on the price of crude oil. The timing of the oil crisis has been extremely off, coming at a time when the global economy was reeling under the losses inflicted by the sub-prime crisis. The recovery from this stage will rely on a large extent to the oil crisis is management.