Monday, July 05, 2010

 

Stock market update as of 06 July 2010

I have been not been updating this post for as much as 6 months (been very busy), but now that I am back to investing on a regular basis in the market, I will be much more regular in updating this post.
The overall economic situation the world over remains fragile, with the biggest economy, the US, still not seeing broad positive signs. Unemployment is still high, does not show signs of changing dramatically for the better; the housing and consumer markets are so-so, with worries that things will get worse. In addition, due to political pressures over too much money being spent which is distorting the budget deficit, the major stimulus problems are now in threat with Obama not being given the level of money he desires.
In Europe, even with some of the economies worried about defaults, including Italy, which is a G7 country and a large economy, there is an opposing argument that is gaining ground, which is that the budget deficits and overall debt are getting unsustainable, and the Governments will have to go in for belt-tightening, something that the British Government is now going in for.
What does this mean for India ? Well, even though the Indian economy is doing great, and the monsoon seems okay for now, we have seen in the past that when the world economy goes through strain, the investments in the Indian stock market get affected and can cause lowering of the index, affecting all stocks. So, the prognosis right now is, buy stocks that you see are fundamentally good, in sectors that are not going to be directly affected due to any export problems (so avoid IT), and be careful in your investments.
Some stocks that I am currently tracking along with current market price (and I do not do price targets, just stocks that I am interested in):
- Action Construction Equipment (Rs. 49)
- Camlin
- HEG
- Patel Airtemp
- Polyplex Corporation
- Supreme Industries (an old favorite)
- Western India shipyards

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