TROUBLE FOR NOW ????

The markets across the globe took a severe beating. But in the last week our markets could bounce from 4700 level to 5100 level. The fall can be considered is from 5700 level. The DAX which is struggling to hold on the gains it made on the previous day. The same is the case with DOW and Nasdaq. This phenomenon is particular to these days but not to the history. The last one month scenario is not at all a consideration when we are talking about the LONG-TERM growth.

All the markets except the Nikkie are in positive zone despite of the turmoil’s they under went. The strength in the markets are not shaken by the Europe and US problems. The markets are apprehensive time and again about the recovery or growth prospects but they are not in bear grip. The bears are exhibiting their strength time and again when ever the opportunities arise. Their strength is well recognized in some sectors where the future is bleak. The Nifty is also traversing in similar lines as discussed above.

The third world countries of yester years are now the hub of growth opportunities, more safety heaven than the EU and US. The activity of patronage may exist for some time, until that inflection point, the FDI will get attracted in countries like India. The current situation in developing nations is the rising inflation which is eating away the growth made. To maintain a balance, attract more stable investments, the RBI and the Govt. are tying to take measures, may take some time. The food inflation now in double digit is causing concern for the govt. in power as they have to satisfy the common man. The aaum audmi khushi will offer KURSI.

The markets in India will get more support from FII as their exposure is increasing quarter on quarter. The mid caps will have good future after two years of consolidation. The telecom sector will see a better future than the turbulent one that exists amidst of spectrum allocation issues. The ADAG group stocks are the real barometer for the markets direction. The Reliance foray into broad band is so silent that the market is not able to digest. The LTE will see better future in India as the usage potential is more due to demographic advantage. The UID will boost the Governance patronage that propels the whole system.

The growth assurance can be taken from the studies conducted and targets set from BMW and Mercedes plans. The studies show that margins may fall by close to 6% due to tight liquidity in the system. These are contradictory to each other but in the time span on a longer scale both are correct. The policy changes at the Banking licenses to private sector will unleash a new area of banking and FII investment will follow. The same is the case with Insurance sector and retail. The huge investment opportunity for FIIs, those floods as inflow of funds into these sectors, waiting for more than two years.

The markets are now in the phase of consolidation. The bounce back of Reliance from 712 level to 812 odd level is a good sign for the bulls to celebrate. The sector rotation will take place in the next two to three months. The bargain hunter placed their bets in the market. The retail investors may take expose in October after analyzing the September results. The direction will be decided in November. The Nifty for now may face resistance at the current highs may slide to 4930-4887 levels and will resume the current uptrend. The ONGC FPO plan shall not become a show stopper.