Hi
Dow Closed Lower on marked weakness
Prev Close: 11,013.18
Open: 11,012.62----Close: 10,846.29---- Change: 166.89 (1.52%)
Day's Range: 10,832.93 - 11,012.62
52wk Range: 10,098.20 - 11,709.10
Nasdaq was also in the same league.
Prev Close: 2,090.24
Open: 2,076.39----Close : 2,054.11 ----Change: 36.12 (1.73%)
Day's Range: 2,054.10 - 2,090.24
52wk Range: 2,025.58 - 2,375.54
World Market appears to be jittery on oil prices and middle east crisis.Iran crisis will only lend fuel to fire.
Indian Market have shown resilience on the back of buying by FIIs and MFs on 12th July.
But FIIs are net buyer for July 06 while Mfs are still net seller. Clearly market weakness has caused redemption pressure on MFs as their performance will take a hit this quarter and investors may be scurrying for cover and safety.
Generally the idea for long term investor is to try to buy low.In bullish time it would be difficult to find such stocks at fair values but during correction the sentiments will cloud the judgement. The contrarian strategy stipulates that when everybody is selling one might think of buying. The selling pressure is broadly linked to the factors which are not internal but external and India has not much control over them. Therefore it would be difficult to read what the scenario would be in the times of uncertainty. For example whether USA will go for another adventure in Iran or if oil source in Iran or other hot spots would be disrupted.
Demands for doesn't seem to be abetting and that clearly means that the economy is growing inspite of oil prices at record high.I just remember in 2004 oil was again a major concern and it was slated to cross $37. Well that's now history.
It touched a record high at $76 and it might touch higher.Govts are thinking of ways and means to substitute for oils as that would become viable if prices rule high. But I doubt that there is a viable alternatives. We do have stories but no substance. Oil producing companies would be benefitted but marketting companies would take a hit.
As our import bill rises there would be less money available for other sectors which in turn slow down the development process and thus reduce the consumption of oil and causing prices to drop.Monetary Liquidity crisis which might hit the financial market in view of rate tightening , would have the impact of reducing money for development purposes and making projects costly and many would get shelved. IPO market would not be available due to negative sentiments and thus also development would slow down.
The china has been able to generate huge surplus or Foreign currency due to positive balance of payment. They are exporting more than what they import.
They can easily finance their energy needs by selling cheap clothes and cheaper toys. Who gives a dime for quality. But in any case our Indian manufactureres are not known for quality either. They are unable to export and generate positive BOP. Most of the businessmen are busy trying to cut through red tapism or hoodwinking the policies for their advantages. Serious and honest entrpreneurs suffer. The repurcussion is that we are in negative BOP. So the objective of exporting more to other countries is not achieved.
Import content needs to be analysed for its type. Is it in the nature of capital goods or in the nature of consumer goods? If it is second type( which can not be avoided in WTO regime) then import will not reflect development process. But on the other hand it is for capital goods then it indicates development. Large part of import bill is oil bill.
Today BOJ would be meeting in Tokyo to decide on rate hike after a looooong time. As ahmed said it is very significant.
Our market has corrected by more than 26%. Some more corrections would be in the offing. The concerns raised above or indicated are related to macro economic performance. Individual stocks always have a chance to perform even in a sliding economy. And ours is certainly not a sliding economy.
The uppermost question in everybody's mind is that if this correction is over or not? or if it is time to purchase stocks?
I believe that stocks would have reached its low on 14th June
14-Jun-2006 2665.05 2767.75 2595.65 2632.80(OHLC)
So far it has held its long term bullish trend. But the crucial test is yet to come. BOJ. The question is whether FIIs would dump emerging markets and go for other safer(???) markets or stick to EMs and India in perticular.
Well, I think they are sticking around and and their objectives have been fully met. They did,t sell to the extent to call it exodus. But swift selling was in itself enough to cause a deep correction. Oue long term objectives are intact and economy would continue to grow by virtue of resilient Indian public.
As for today's market It might start weaker but as day progresses its movement would depend on BOJ and its impact on various world indices as would be seen in the course of the day. Mostly factored in yet uncertainty would remain. If nothing unexpected occurs we would see a consolidation pattern firming up and may be a time to check for low volume and reducing volatality as that would give clue for next break. meanwhile Watch FIIs.
Pankaj
Dow Closed Lower on marked weakness
Prev Close: 11,013.18
Open: 11,012.62----Close: 10,846.29---- Change: 166.89 (1.52%)
Day's Range: 10,832.93 - 11,012.62
52wk Range: 10,098.20 - 11,709.10
Nasdaq was also in the same league.
Prev Close: 2,090.24
Open: 2,076.39----Close : 2,054.11 ----Change: 36.12 (1.73%)
Day's Range: 2,054.10 - 2,090.24
52wk Range: 2,025.58 - 2,375.54
World Market appears to be jittery on oil prices and middle east crisis.Iran crisis will only lend fuel to fire.
Indian Market have shown resilience on the back of buying by FIIs and MFs on 12th July.
But FIIs are net buyer for July 06 while Mfs are still net seller. Clearly market weakness has caused redemption pressure on MFs as their performance will take a hit this quarter and investors may be scurrying for cover and safety.
Generally the idea for long term investor is to try to buy low.In bullish time it would be difficult to find such stocks at fair values but during correction the sentiments will cloud the judgement. The contrarian strategy stipulates that when everybody is selling one might think of buying. The selling pressure is broadly linked to the factors which are not internal but external and India has not much control over them. Therefore it would be difficult to read what the scenario would be in the times of uncertainty. For example whether USA will go for another adventure in Iran or if oil source in Iran or other hot spots would be disrupted.
Demands for doesn't seem to be abetting and that clearly means that the economy is growing inspite of oil prices at record high.I just remember in 2004 oil was again a major concern and it was slated to cross $37. Well that's now history.
It touched a record high at $76 and it might touch higher.Govts are thinking of ways and means to substitute for oils as that would become viable if prices rule high. But I doubt that there is a viable alternatives. We do have stories but no substance. Oil producing companies would be benefitted but marketting companies would take a hit.
As our import bill rises there would be less money available for other sectors which in turn slow down the development process and thus reduce the consumption of oil and causing prices to drop.Monetary Liquidity crisis which might hit the financial market in view of rate tightening , would have the impact of reducing money for development purposes and making projects costly and many would get shelved. IPO market would not be available due to negative sentiments and thus also development would slow down.
The china has been able to generate huge surplus or Foreign currency due to positive balance of payment. They are exporting more than what they import.
They can easily finance their energy needs by selling cheap clothes and cheaper toys. Who gives a dime for quality. But in any case our Indian manufactureres are not known for quality either. They are unable to export and generate positive BOP. Most of the businessmen are busy trying to cut through red tapism or hoodwinking the policies for their advantages. Serious and honest entrpreneurs suffer. The repurcussion is that we are in negative BOP. So the objective of exporting more to other countries is not achieved.
Import content needs to be analysed for its type. Is it in the nature of capital goods or in the nature of consumer goods? If it is second type( which can not be avoided in WTO regime) then import will not reflect development process. But on the other hand it is for capital goods then it indicates development. Large part of import bill is oil bill.
Today BOJ would be meeting in Tokyo to decide on rate hike after a looooong time. As ahmed said it is very significant.
Our market has corrected by more than 26%. Some more corrections would be in the offing. The concerns raised above or indicated are related to macro economic performance. Individual stocks always have a chance to perform even in a sliding economy. And ours is certainly not a sliding economy.
The uppermost question in everybody's mind is that if this correction is over or not? or if it is time to purchase stocks?
I believe that stocks would have reached its low on 14th June
14-Jun-2006 2665.05 2767.75 2595.65 2632.80(OHLC)
So far it has held its long term bullish trend. But the crucial test is yet to come. BOJ. The question is whether FIIs would dump emerging markets and go for other safer(???) markets or stick to EMs and India in perticular.
Well, I think they are sticking around and and their objectives have been fully met. They did,t sell to the extent to call it exodus. But swift selling was in itself enough to cause a deep correction. Oue long term objectives are intact and economy would continue to grow by virtue of resilient Indian public.
As for today's market It might start weaker but as day progresses its movement would depend on BOJ and its impact on various world indices as would be seen in the course of the day. Mostly factored in yet uncertainty would remain. If nothing unexpected occurs we would see a consolidation pattern firming up and may be a time to check for low volume and reducing volatality as that would give clue for next break. meanwhile Watch FIIs.
Pankaj
