Yesterday DOW had the worst session for the whole of this year. It fell by nearly 2 % , with Nasdaq Comp also closed in the deep red down about 2 %. The main reason for this sell off is the consume confidence index numbers for the month of April which came over the weekend. Although the numbers are above street expectations but they are lower as compared to March. This fall led to crashes in emerging markets as Brazil is down almost 4.5 % and Russia which was also down almost 4 % intraday but managed to recover a bit. We can this weakness all over th emerging markets today as Nikkei is down 2 % and so are Strait Times , Hang Seng etc. We can expect Sensex and Nifty to open gap down and then it may stablize at around 3050 level for Nifty and 10,400 for Sensex. These are the crucial levels to watch for today. I think we also manage to close down about 2% or so then it is ok , but if we dont see any support emerging at these levels and we close down much below than this then those are probably disturbing signs and we may went all down to test the recent lows made on 22nd May.
Quote of the day : "Do you have any idea how cheap stocks are now? Wall Street is now being called Wal-Mart Street." -- Jay Leno
Wednesday, May 31, 2006
Monday, May 29, 2006
Indian Stock Market
I am betting on sensex and nifty will test their recent lows of 9900 and 2800 respectively. The reasons for the same are :
1) If US fed hikes rate on June 29th, it may cause huge unwinding of FII's positions across all emerging markets
2) Japan is also about to raise it's interest rate from the current 0% for the first time in such a long time.
3) Commodities are for sure in a large structural bull market but for the time being they need to take a breather.
Apart from these Global factors, Sensex is trading at a P/E of 17 currently, which may not be expensive but it is not cheap either.
MF's of India who were able to garner quite a huge sum of some 10K crore through NFO's have no more money to deploy as they have already put some 10K crore in this market during the recent correction. So if now FII's start selling then there will not be any MF support anymore.
Technically speaking also as most of the techincal experts say "we are in intermediate downtrend and at best we can remain rangebound for some time to come"
Inflation rose from 3.57% to 4.32%. Also for the first time since crude crossing $70 a barrel, we are going for hike in petrol and diesel. This will invariably push the price of key things and will lead to higher inflation.
Quote of the day : It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.
1) If US fed hikes rate on June 29th, it may cause huge unwinding of FII's positions across all emerging markets
2) Japan is also about to raise it's interest rate from the current 0% for the first time in such a long time.
3) Commodities are for sure in a large structural bull market but for the time being they need to take a breather.
Apart from these Global factors, Sensex is trading at a P/E of 17 currently, which may not be expensive but it is not cheap either.
MF's of India who were able to garner quite a huge sum of some 10K crore through NFO's have no more money to deploy as they have already put some 10K crore in this market during the recent correction. So if now FII's start selling then there will not be any MF support anymore.
Technically speaking also as most of the techincal experts say "we are in intermediate downtrend and at best we can remain rangebound for some time to come"
Inflation rose from 3.57% to 4.32%. Also for the first time since crude crossing $70 a barrel, we are going for hike in petrol and diesel. This will invariably push the price of key things and will lead to higher inflation.
Quote of the day : It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine--that is, they made no real money out of it. Men who can both be right and sit tight are uncommon.
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