Comments from Newsletter

MARKETS IN A PANIC MODE: From upper circuits to lower circuits.
The current market mood defies all logical predictions. Budget has come and gone added its own gloom. No doubts there. But we have seen earlier Budget bouncers which do not linger for ever. All these days the markets were ours and they reflected our own thinking. Today things have changed totally.
Markets have started taking cues from globally. What happens in China will decide the future course of the global markets. In the mornings if the Asian Markets recover ours too recover. In the Afternoon (as the timings are extended) what happens in the European markets too become our concern. Then in the night the US Markets make us sleepless.

At the time of filing this report just see the headlines in the CNN Money regarding the US

Market at 10.07 IST:

Confusion after the rally

Investors caught between extending the rally and retreating; major gauges wobble; oil prices jump after inventories report.

This head lines will evenly match with our market behavior the whole day today. Our market too rallied and then frizzled out.

MARKET OUTLOOK: When the markets are sliding opinions expressed are always more bearish and said there will be further fall. Vice versa is the case when the markets are booming. But the current behavior of the markets baffles every one. It opens high and without any rhyme or reason go into a tail spin and slide all of a sudden changing the mood of the market totally.

No one is able to pin point why such a fall when almost every co. has come out with such fabulous results. Even the negative factors of the budget may not spoil their party so easily. It is too early to conclude that the next quarter will be bad. Budget will be soon forgotten but not the well managed corporate

Most of the newly entrants to the markets who entered when the Sensex was around 14500 with every one expecting a Sensex of 15000 before the budget have got hurt and wants to get out as quickly as possible and trapped as they cannot sell as the whole markets are in a lower circuit.

This too will pass: Let us see that there are the rays of hope. Even today when Mind Tree got listed it has got a fabulous opening quotation of Rs.673 (issue price Rs.425) and settled at Rs.620. In such a bearish market some can survive is indications of all hopes are not lost yet.

Today there have been so many bulk deals where the FII have participated. Not that they are all sellers and want to quit India. Goldman Sachs bought 20 lakh shares of Punjab National Bank, UBS Sec 2.25 lakh shares of Mind Tree; HSBC bought 1.90 lakh shares of IOL broadband.
Even thought the prices of several shares have fallen and are looking attractive one is unable to predict when the normalcy returns to the market. Hence it is better to wait for some time and to buy even at a slight higher rate once we know where the markets are heading rather than buying at lower rates and finding the prices falling further.