At 10:30 a.m., the Sensex was down another 700 points, a second such successive fall!! The markets have been bearish for the last 4-5 trading sessions; the looing recession in the U.S. hasn't helped either. However, for those of you following the blog, I'm sure you all must be wondering how see-saw is India's growth story!! Hey hey hey!!
I would like to stress that the growth factors are still intact -- The economy is in sound shape, there is a booming realty drive sweeping across the country, money is being pumped in to improve every aspect of the country's infrastructure.. However, there is a lack of liquidity in the markets. The New Fund Offerings in the monet of December cleaned out a lot of money.. If that wasn't enough, Reliance came out with yet another IPO of another fundamentally (un)sound company, Reliance Power (atleast, if you compare the valuation with that of Tata Power and NTPC, which cleaned out close to Rs. 7 trillion .. Well, the sum is so astronomically huge that I request you all to forgive me if I'm a bit off the mark with respect to the number of zeroes.. Plus, the FII have been net sellers of equity worth Rs. 4500 crores in the last 2 trading sessions itself...
So, you may say that the dream of the Sensex continuing its dream run has been nipped in the bud by the lack of liquidity.. However, it is just a short-term effect! Normalcy will be restored in the later part of this week and the first week of Feb.. I believe that the Indian AMCs have ample fund with them to drive the next phase of growth, so we need not fret if the FIIs ignore us for the time being! These are testing times for any investors; I would advise short-term investors to either stay away from the market or indulge in only intra-day trading for the time being! Long-term investors need not worry.. The correction gives another chance to the Sensex to rise from the ashes like a Phoenix!! So, keep enjoying the SenseXXXational Ride!!
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