Saturday, April 12, 2008

 

India stock market update 12 April 2008

The market continue to remain range-bound with an immense amount of volatility, jumping up and down in alternate patterns. Sentiment remains bad; there are signs that the bottom may be approaching, but news remains bad. The over-whelming factor driving the market is sentiment, and that remains mostly negative. It is now the 4th month of the year, and the carnage started in the first month, so things have been bad for some time now. Of course, all the doom-sayers have crawled out of the places where they were hiding, and if you believe all the bad things that you hear, then you would totally exit the market.
However, there is plenty of bad news, that affects sentiment. The US is in a recession, and there is no sign yet that the recession could get lifted soon. In India, the Government is almost foundering in its attempt to save its political ass. It has not done anything significant to increase agricultural production, and hence is being forced into threatening decades old repressive measures to reduce prices.
Inflation is forcing an extension of the credit squeeze that is suffocating the industry and causing a lowering of overall growth; exporters are being squeezed so that enough is available domestically. Nothing right now seems to be going right for the Government, with all dividend from the dream political give-all budget having vanished.
However, all literature on equity advices to buy fundamentally sound companies, especially when they are down, so this is a good time to do small investments into companies such as Reliance, ITC, SBI, Infosys, etc.

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