THE MOVE BEYOND…………

The markets made a blow out move after crossing the all time high at 4640 level- a nonstop journey to 4850. The word of caution at this point is the markets move up but with selective scrips participating the move. When we compare the scrips performance with the Nifty from the previous high to this level, there are very few stocks that advanced, but the Nifty crossed the high with “The RELIANCE group”. The Ambanis only enjoyed- as a matter of fact it could be the real cause of worry. A negative thinking can pose a question that “Is this group that represents the whole economy?”. If your answer is ‘Big No’ then there is something cooking.

But the other side of the story is colourful when we consider the past experience of the FIIs. In the global melt down that happened last year, the FIIs were trapped in the illiquid counters. The bitter experience due to illiquid counters and small companies kept them away from choosing them. The same story continued with the case of Sugar stocks, tea stocks and the other commodity & under performing sectors. The lessons learnt are costly and nightmare haunts them till date. So they are focusing and patronizing those groups that assure them consistent returns.
The FIIs are pumping money in the hot sectors with sound management. In the same energy sector, ONGC is kneeling down at RIL, REL is a high fly where as the NTPC, CESC and other power companies seeking fund support. The RCOM is jubilant where as the other MTNL and VSNL are surviving. The RNRL and RIIL are zooming where as others scouting for buyers.
The story is as simple as that- the real test for INDIAN stock market is the domestic FIs, the MFs and the venture capital funds shall come forward to encourage the best management groups to flourish along with the investors.