Monday, February 04, 2008
India stock market update 05 February 2008
The current situation is that there is a crisis of sentiment in the market, with the constant pulling out of funds by FII's scaring people. That trend seems to be slowly coming to a halt, and on the positive side, the liquidity crunch caused by the massive withdrawal of money for the Reliance Power IPO seems to be subsiding, money has been refunded to people.
What are the positives ?
- India is still growing (with the caveat that the high interest rate regime by the RBI is affecting credit and growth)
- Sectors of industry are affected by the gains of the rupee vis-a-vis the dollar, and it is likely that these sectors will continue to hurt (textiles, IT, and many others)
- Equity remains the best growth medium around in the long run
- Liquidity in the system needs to find an outlet, and those are typically either property or equity, or a combination of both
- All expert advice is normally that when people are selling is a good time to buy (especially when considering the above factors)
What to do now ? Evaluate stocks that are in a growth path or are not in an industry that is in a slow-down, and based on fundamentals of the stock, decide on whether you want to buy or not.
Stocks that I am currently tracking:
1. Hindustan Construction: Rs. 190
2. Nirlon - Rs. 112
3. Almondz Global Securities - Rs. 82
4. Assam Company - Rs. 36
5. English Indian Clays - Rs. 2100
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