Rosy looks.....

The makets are in jubiliance of FII inflow as the cash chasing the stocks is now unstopable. The markets are recovered from the lows and continue to consolidate at these levels for some time. Please do read my earlier postings in which I categorically said that the support at 4600-4500 for Nifty. Also mentioned that it doesn't matter whether it is 4400 or 4500. I recommended certain shares like Rel cap and RelInfra, most beaten down made a huge short covering rise, but people made lot of money.
Now the Nifty is well above the psycholical support of 4850-4900.The news flow will be good from now but the markets will ignore that to reflect in the price, but the news already priced in. The classic example is LT and BHEL. Now the news flow is -CAPITAL GOODS will do well infuture.
The RBI cut CRR ratse by 50 basis points is also a surprise to me. But the fact is that the market participants heavyly betted on the bull side that the RBI will make a rate cut atleast by 25 basis points.So there is a huge bonus. The liquidty in the system increased by 32000 crores is a good sign.I have my reservations at this point. The RBI is worried about growth rate and tight liquidity in the system but was encouraged by the falling inflation, gave confidence for a rate cut.
But the external market arround is not condussive to absorb the investments and make returns out of it. Then, the free availability of the cash may push for a bad investment decisions. As of now our growth at arround 7% is not a bad sign. So the RBI should have continued this tight CRR policy and used a OMOs for liquidity generation. The Open Market operations could have become as and when-infusion, rather than a blanket. Now our growth is surviving on the internal consuption and external dependency as usual. Now the markets are celebrating with Cheers!!!. Later the NPAs of banks will increase. The deffered/delay in payments will turn out to become as NPAs with cyclical effect that passes on from one sector to other and the industy will suffer badly.The Govt would have taken enough steps to boost the spending and would have generated some demand rather than allowing the industry to face the external music directly.
Now the markets are enjoying and will enjoy because of the short term euphoria of liquidity inflow and the STOP LOSS triggering. Techically the markets are now in bull grip. So long as SBI floats above 1860 level, the markets are in bull grip. The Nifty is enjoying the support of Reliance and the Banking majors. the only under prformer is HLL. I posted the reasons why HLL will under perform in my previous posting.The markets will be in bull grip due to DAVOS and in India at least till the first week of March-12.you know why?.....