Series of bad news like 22% lower advance tax collection, fears of a military conflict with our neighbour Pakistan, little trading due to Christmas holidays, financial year ending for many FIIs etc led our key indices Sensex fall 770.99 points or 7.63% to 9328.92 and NSE by 220.25 points or 7.16% to 2857.25
Corporate goverance debacle of Satyam still remained in the limelight and further dipped the company's share due to the ban imposed by World Bank. Corporate earnings will start in the 2nd week of Jan, 2009. Expectations of good results are quite bleak or none, if I may say so. The question here is "How bad will it be?" and even more important question is "What lies ahead?"
Govement is expected to announce the 2nd stimulus package soon. 1st Stimulus package was aimed to lure the votes of the lower income group and safeguard some sick sectors. 2nd Stimulus package should focus on the middle income or the common man of India. This should cover some steps to ease liquidity, relief measures for the export oriented companies, anti-dumping laws to safeguard indian industries against China etc.
Inflation numbers further moderated at 6.61% from this years peak of 12.91% and Crude oil has well settled below $40 and is close to dip below $35 per barrel.
FIIs are fleeing our market and last week they were net sellers worth Rs 959 Crore and so were our domestic fund houses
Indian Stock Market has not bottomed yet. We strongly believe that we should see new lows around Feb - March, 2009. Presently the market is good for intraday or short term investors. Once the new lows happen i.e. post Jan results, it should be the time for long term investors to do the cherry picking.
Happy New Year!
Happy Trading!
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