Wednesday, July 30, 2008


India stock market update 30 July 2008

This has been a very strange month for the stock market and for the country as a whole. From the beginning of the month, the country has been debating the pros and cons of the nuclear deal (quite frankly, this deal would not have seen this controversy if the Left parties had not opposed it). With the Prime Minister finally standing firm and the Congress High Command standing right behind him, the month saw a lot of political tension. Amar Singh ran circles around the Left parties, and eventually the long running support of the Left was withdrawn to be reduced to a cobbled up support by the SP and many smaller such parties.
The stock market behaved along with these dips and rises. The market went up and down whenever it seemed like the Government was in a better position, and went down when the Government's position seemed to be doing down. Finally, when it seemed like the Government has the numbers, the market gave it a big thumbs-up. With the Left gone from its commanding position of choking the reforms process, and a reforms-friendly SP in (and the BJP being a supported of reforms), big money reforms seemed to be indicated.
Then the bomb blasts, and a measure by the RBI to bring down the inflation led to a further increase in interest rates. The economic outlook remains uncertain, so any buys need to be in safe and fundamental stocks such as Reliance, ITC, Infosys, ICICI, etc. No big money investment, but something like a regular SIP should be great.

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Tuesday, July 08, 2008


India stock market update as of 08 July 2008

I am writing this blog on a more infrequent basis, given that the market is really not doing anything great nowadays ? With the continued climb in the price of oil above $140 per barrel, and inflation crossing the 12%, there is a massive onslaught on the equity market, with almost confirmed speculation that the fast rise in the realty market over the past few years has come to an end; that real estate deals are down, and that many smaller players are having a harder time.
I am still holding on, given that I believe in 2 things:
1. All my education years wherever I have studied either finance or economics (and specifically the equity market), there has always been one standard logic. When the time is down, when people are not buying, then this is time to buy. I still believe in that, and so prefer to look out for some great scripts that are available at pretty reduced rates now (such as Reliance, Infosys, ICICI Bank, Tata group, etc)
2. Secondly, over a long term, equity market has always given the best results, and this crash has been happening for a period of 6 months so far. Previous crashes and downturns have gone on sometimes for much longer periods, but there has eventually been a recovery.
At the same time, I will not deny that the situation remains painful. Timing the bottom of the market in this situation is very hard (you buy a script, and then it can fall much further); and the participation of retails investors, FII's and domestic FI's are all very low.
So, I keep on watching and monitoring. What do you people think ? What is the future like in the short term and long term ?

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