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Friday, October 24, 2008
Markets
Asian markets opened lower and now trading mixed. The SGX Nifty is down 106 pts to its previous close. As per some technical analyst, the market may trade weaker and shorts have been created in the realty and metal sector. New longs are being taken in the capital goods sector. As we told earlier the support of 9830 breached and have come down and closed at 9771. Next support comes at 9500 levels. For a bull market correction it can extend to a maximum of 61% retrenchment, and for SENSEX @ 21000 it shows the bottom as 8270 levels. In case if the index touches this levels the PE Ratio of SENSEX will be around 10.33 which looks very much attractive. But looming uncertainty confuses all technical analysts and all market calls are going wrong. So be prepared for a tough period and patience pay reward in a long term perspective.
Tuesday, October 14, 2008
Market Open
The US Dow up by a stunning 936 points at the closing , since the US goverment had initiated programmes to take in US banks, as reported by various media.
Today we may see a gap up opening and Sensex may sustain around 11500 levels. We expect the indices may stay around this levels with +ve bias, since huge short covering is going on.
Today we may see a gap up opening and Sensex may sustain around 11500 levels. We expect the indices may stay around this levels with +ve bias, since huge short covering is going on.
Monday, October 13, 2008
What to Expect
As a premarket check , the SGX Nifty October 2008 is around 63 pts up @ 9.30 am IST and SGX Nifty Nov 08 seris is up by 108 pts at the same time. This shows the market may open up by around 100 to 150 points (Sensex) up in the opening and the trend may change around 12.30 pm IST when European markets open.
In the stock specific ICICI Bank says there is no need of panic, and their Capital Adequacy Ratio at 13% where it is required only 9% as per RBI norms. ICICI Bank CEO Kamath also clarified the same along with RBI and FM.
As we have written earlier the market may find the bottom in the comming days. Longterm investor can start buying shares in the battered frontline stocks in the mid cap segment like Hindalco, Indian Hotels and Allahabad Bank. In large cap RIL and L& T looks better.
The short-term outlook remains weak in spite of the fear of a recovery. Traders need to sell and identify sell opportunities irrespective of the stop loss violation. The only problem is the gap down opening, which does not offer scope to trade for day traders. Traders, who can risk more and roll the trades can benefit. This means that only a handful of traders can take advantage. All others will be left watching the match from the pavilion.
Long-term investors who have the liquidity and holding capacity and do not get worked up by short-term underperformance and who don’t follow the market on a daily basis, will get an opportunity to accumulate in low volumes in a staggered way. There is a ‘Sale’ in equity markets and buyers have the choice to accumulate stocks at attractive prices. The lower level of 8800 would be ideal for investors with long-term horizon to accumulate in a staggered manner. Since traders cannot adopt this strategy, they must follow the price and trade with the trend.
Happy Trading
In the stock specific ICICI Bank says there is no need of panic, and their Capital Adequacy Ratio at 13% where it is required only 9% as per RBI norms. ICICI Bank CEO Kamath also clarified the same along with RBI and FM.
As we have written earlier the market may find the bottom in the comming days. Longterm investor can start buying shares in the battered frontline stocks in the mid cap segment like Hindalco, Indian Hotels and Allahabad Bank. In large cap RIL and L& T looks better.
The short-term outlook remains weak in spite of the fear of a recovery. Traders need to sell and identify sell opportunities irrespective of the stop loss violation. The only problem is the gap down opening, which does not offer scope to trade for day traders. Traders, who can risk more and roll the trades can benefit. This means that only a handful of traders can take advantage. All others will be left watching the match from the pavilion.
Long-term investors who have the liquidity and holding capacity and do not get worked up by short-term underperformance and who don’t follow the market on a daily basis, will get an opportunity to accumulate in low volumes in a staggered way. There is a ‘Sale’ in equity markets and buyers have the choice to accumulate stocks at attractive prices. The lower level of 8800 would be ideal for investors with long-term horizon to accumulate in a staggered manner. Since traders cannot adopt this strategy, they must follow the price and trade with the trend.
Happy Trading
Saturday, October 11, 2008
The Future ?????????
In an anticipated move, the Reserve Bank of India, or RBI, has cut the cash
reserve ratio, or CRR, by 150 basis points to 7.5% with effect from 11th Oct 2008
in a bid to infuse liquidity into the markets.The announcement came close on the
heels of a sharp fall of over 1,000 points on the Sensex on Friday morning amid
cues from falling global markets. Soon after the announcement, the Sensex recovered
a bit, before falling again later.
What Next
The positive factors are
CRR cut 7.5% from 9% earlier
Below than expected levels of Inflation at 11.8%
and Falling crude oil at around $80(Nymex)
But, then why the market goes down
There is a tight liquidity between Indian Banks and liquidity crunch between
US and European Banks are more cause of worry. Investor in overseas feels there
may be more fall outs in the coming days. US's Fed Reserve, UK's BOE and EU's ECB
have started infusing liquidity into the banking system. This may bring some relief.
According to some of the media reports the foreign banks are not ready to lend each
other. All the banking regulators are trying to bring normalcy in the money market.
This may take some time to calm the investors, at the same time they feel that the
current situation has proved the confidence is shakened. Very much uncertainty prevails.
There is no clue about when this US recession will end.
Back home, the Indian Markets shows some support around 10500 for SENSEX.
The next very immediate support comes @ 9830 as pet the line charts for the last 3 years.
Hope that may not broken. But the Long Term investors may start picking front line
shares in a staggered manner. As the valuation looks realistic levels one can start buying.
Please visit us on Monday Morning for market report.
reserve ratio, or CRR, by 150 basis points to 7.5% with effect from 11th Oct 2008
in a bid to infuse liquidity into the markets.The announcement came close on the
heels of a sharp fall of over 1,000 points on the Sensex on Friday morning amid
cues from falling global markets. Soon after the announcement, the Sensex recovered
a bit, before falling again later.
What Next
The positive factors are
CRR cut 7.5% from 9% earlier
Below than expected levels of Inflation at 11.8%
and Falling crude oil at around $80(Nymex)
But, then why the market goes down
There is a tight liquidity between Indian Banks and liquidity crunch between
US and European Banks are more cause of worry. Investor in overseas feels there
may be more fall outs in the coming days. US's Fed Reserve, UK's BOE and EU's ECB
have started infusing liquidity into the banking system. This may bring some relief.
According to some of the media reports the foreign banks are not ready to lend each
other. All the banking regulators are trying to bring normalcy in the money market.
This may take some time to calm the investors, at the same time they feel that the
current situation has proved the confidence is shakened. Very much uncertainty prevails.
There is no clue about when this US recession will end.
Back home, the Indian Markets shows some support around 10500 for SENSEX.
The next very immediate support comes @ 9830 as pet the line charts for the last 3 years.
Hope that may not broken. But the Long Term investors may start picking front line
shares in a staggered manner. As the valuation looks realistic levels one can start buying.
Please visit us on Monday Morning for market report.
Tuesday, October 7, 2008
Open Ecchange
SGX Nifty up by 70 pts @ 9.45 am
Markets expected to open up with a gap and move towards 12300 levels
The SEBI move to free up P-Notes will have minimal impact as there is counter
party risk aversion in the market right now. Sentimentally though it could be
seen as a positive. The CRR cut was on expected lines as liquidity was extremely
tight for the past few days.
Market is near its bottom & there is little room on the downside from a valuation
perspective. We are likely to see more good news and may see more rate cuts
globally. The SEBI move is a positive but clarity is needed on the timeline of
implementation. I would not advise going short at these levels. Investors can buy
with a 1-year horizon.
Markets expected to open up with a gap and move towards 12300 levels
The SEBI move to free up P-Notes will have minimal impact as there is counter
party risk aversion in the market right now. Sentimentally though it could be
seen as a positive. The CRR cut was on expected lines as liquidity was extremely
tight for the past few days.
Market is near its bottom & there is little room on the downside from a valuation
perspective. We are likely to see more good news and may see more rate cuts
globally. The SEBI move is a positive but clarity is needed on the timeline of
implementation. I would not advise going short at these levels. Investors can buy
with a 1-year horizon.
Monday, October 6, 2008
Breaking News
Breaking News
RBI have decidet to cut the CRR (Cash Reserve Ratio) by 50 bps to 8.5% wef 11th Oct
Rbi move is aimed to boost the liquidity in the Banking system since the liquidity crunch
due to regulatory messures.
CB Bhave, Chairman, Securities and Exchange Board of India (SEBI), said norms on participatory notes have been revised and the limit on overseas-derivative instruments (ODIs) in both cash and derivates will be removed. “The 40% cap on assets under custody in cash market will be removed,” he said.
Earlier, in October 2007, the Sebi had banned fresh issue of P-Notes by FIIs. This was done to check the significant flow of foreign funds into the Indian stock markets. The excess liquidity was difficult for the financial market regulators to handle.
Both are good news for the markets
RBI have decidet to cut the CRR (Cash Reserve Ratio) by 50 bps to 8.5% wef 11th Oct
Rbi move is aimed to boost the liquidity in the Banking system since the liquidity crunch
due to regulatory messures.
CB Bhave, Chairman, Securities and Exchange Board of India (SEBI), said norms on participatory notes have been revised and the limit on overseas-derivative instruments (ODIs) in both cash and derivates will be removed. “The 40% cap on assets under custody in cash market will be removed,” he said.
Earlier, in October 2007, the Sebi had banned fresh issue of P-Notes by FIIs. This was done to check the significant flow of foreign funds into the Indian stock markets. The excess liquidity was difficult for the financial market regulators to handle.
Both are good news for the markets
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