Wednesday, April 04, 2007

 

India stock market update 5 April 2007

For the last 4 days, the Indian stock market has been doing a somersault of sorts, seriously testing the mental balance of investors. On Monday, the market reacted to the RBI money-tightening measures by the sensex dropping a jaw-dropping 616 points. There was a lot of chaos, and I would think that this single day did more to scare retail investors than the normal volatility. From talking with people, they are worried about whether their capital is safe.
My response to this has always been something like a deja vu, we have seen this in the past (as recently as last year), where after the May carnage, stocks were down for a few months and recovered to zoom past all previous highs. There is no guarantee of that happening, and if the growth level remains high, then things should remain fine.
However, with inflation being seen as important to reduce, the government is implementing measures to tighten credit and bring down inflation money supply and hence bring down prices. Such tightening on credit reduces the amount of free money available to corporations and hence lowers the money supply in the economy.
Stocks that I am currently tracking:
1. IFCI: Rs. 34.95
2. Bharti Airtel: Rs 744
3. Karnataka Bank: Rs. 165
4. Yes Bank: Rs. 142.55
5. IVRCL: Rs. 265.55

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