Thursday, February 15, 2007

 

Stock update 16 Feb 2007

The Indian stock market did yet another somersault, and after hesitating, and falling below the 14k mark, is now above it again, displaying handsome gains on Thursday (the 15th) and jumping above the 14,300 mark. This time the RBI was blamed for this sudden slump, with its decision to raise the CRR rates. This had the effect of sucking out more liquidity from the system, and was seen as the government being willing to sacrifice some amount of growth to control inflation. Inflation is seen as critical for the government. Realistically, a higher rate of inflation hurts the poor more, but an inflation rate of under 7-8% is statistically low for India. In the long term, a better growth rate is what will pull up everybody.
There is increasing disillusionment with reality stocks, and more advice is now coming to lock-out gains made in these stocks. I am somewhat of a mixed mind on this; after all, interest rates are going up, and these will make home loans more expensive, and depress demand. But with higher growth rates, demand for housing will only keep on increasing. And, sentiment in today's market does not necessary mean anything, since sentiment can quite literally turn around in a couple of days of trading.
I am pretty much done with hotel stocks for now, there have been long periods of no change, and my patience has come to an end.

Stocks that I am currently tracking:
1. Indiabulls - Rs. 422
2. Yes Bank - Rs. 150
3. Northgate - Rs. 1000
4. Infosys - Rs. 2410
5. Trigyn Technologies - Rs. 31.45

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