Indian Stock Market opened the New Year's first week with a firm start and Sensex gained 629.30 points or 6.75% to close at 9958.22 and National Stock Exchange's Nifty gained 189.50 points or 6.63% to finish the week at 3046.75
Inflation numbers further inches down to 6.38% from this years peak of 12.91% and Crude oil sprung back to $45+ per barrel.
FIIs are fleeing our market and last week they were net sellers worth Rs 150 Crore whereas our domestic fund houses were buyers for around 800 Crore.
Indian government announced the much awaited stimulus package. The package has an additional plan expenditure of Rs 20,000 Crore mainly for rural development, infrastructure and social security measures. Also the policies will support exports, housing, textile sectors, small scale industries.
RBI also announced several rate cuts - CRR by 50 bps, Repo & Reverse Repo by 100 bps. This would infuse a lot of liquidity in the system and should reduce the deposit and lending rates soon.
Overall the package is not that appealing that it would boost the market big time. The New Year's firm start would soon fizzle down once the Q3 results of corporates start pouring in. Everyone is expecting that the market would break the October's low and could touch 7500-7000 during Jan-Mar.
Long term investors should be on the lookout to buy quality stocks on this downward trend and hold them for atleast 12 months time for a phenomenal returns.
We have again started adding the Delivery Calls for short(max 3 months) and long term(12 - 15 months) durations.
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