Sensex fell below the psychological 9,000 mark. World stocks fell on prospects of a deep global recession. Japan, Germany, Hongkong, France all have declared recession! US and UK are also in undeclared recession. What can we expect in the current situation.. ??
Chidambaram, our Finance Minister, has hinted that the country could miss its annual export target of $200 billion for this fiscal year because of the slowdown in developed nations. Our economy after growing at an annual rate of 9+% in the past three years has slumpedto 7.9% in the April-June 2008 quarter. The Reserve Bank of India has downgraded its growth forecast to 7.5% - 8% for the current financial year. A sharp set back like this could bring another round of selling which could bring our sensex down as the sensex has to adjust for the future earnings.
With banks tightening the credits to Real estate companies, there could be some more downsides in the real estate companies. We think there may be a strong selling happening in DLF, Punj Lloyd, Unitech etc.
With China's slowdown we could also face some problems with commodity-related companies. Metal stocks can face a strong sell of Hindalco,Ispat industries, Tisco, Sail could face further problems.
WIth the strengthening of the US dollar against INR, we could face problems in Financial sectors. Stocks like Rel. Capital, KotakMahindra in particular may have selling pressure.
Generally Sensex Heavyweights stocks like RIL, SBI could also be in trouble as FIIs are queueing up to take away 10 billion US$ from India bourses.
We feel index is currentlty on a downtrend and it is too early to buy the shares and the year 2009 will be the best year for bottom fishing.
We do hope that we would get wonderful opportunity to buy some great stocks at great price..!!
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3 comments:
I am not a stock guy, but from the little knowledge i have, I agree with what you said. The total sensex is in downward trend. Though I am worried that what's the bottom, my major concern is when will it come back? when will the recession end?
by the way, you have said that the 2009 is good for bottom fishing .. !! why do you say that ? any data behind it ?
thanks Rama...
It is clear that Bear phase is less than a year old,
it is too short time for the wounds to heal,
any stock market rallies in the meantime is likely to be a Bear Market Rally (Trap) rather than recovery.
the risk catching a "falling knife"
you buy cheap, but prices get even cheaper...!!
Good job , it would be more informative if you speak out link with dollars and rupees , what will be its effect on crudes ?
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