Sunday, April 29, 2007


India Stock Market Update 29 April 2007

After a number of days of rise, the stock market crashed on Friday, with the sensex crashing by more than 300 points to close below 14,000. This, in my opinion, is primarily due to profit booking, since there is a feeling that stocks have again surged sharply after the last low. This is actually wise, but a retail investor is always confused. Even if you do profit booking on shares that have increased a lot, what do you do with the money that you get.
One option is to put it back in the market, but unless you can identify stocks that are going to keep on going up, it is difficult to do profit booking and re-deploy funds. In addition, even though mutual funds are touted as the smart option for investors, they have been an acute disappointment. Funds have crashed in line with the sensex, not actually living up to the concept of funds that can beat the market. This has been my experience, and that too after investing in funds that are supposed to be the best in the India market.
However, right now, mid-caps are slowly catching fire again, and if you have the patience and energy (and the will power), investing in engineering and realty mid-caps is something that I am looking at. Keep in mind that these stocks are risky, and only do so if you are willing to bear the risk:
1. Era Constructions: Rs. 350
2. Garnet Constructions: Rs. 70
3. Bag Films (short term): Rs. 44
4. Navin Flourine (slightly long term): Rs. 315
5. JMC Projects: Rs. 234

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