What a memorable year 2007 has been for the markets! The markets have crossed many hurdles and accomplished a few things which even the die hard bulls had not foreseen! The year 2008 should be another exciting year for the markets, with the launch of the second energy/power bourse and launch of the mini-derivatives segment. Both these launches are expected to take place in the first month of the coming year itself.
Instead of picking out specific stocks for investment, I will stick to pointing my readers' attentions to two groups or clans: Reliance and Tata. Both are multinational companies; there ain't any additional new material which I can write to sing the glories of the Tatas or the Ambanis which hasn't been written and read already!
But 2008 is going to be special for both these groups! With the launch of the Rs. 1 lakh car by the Tatas to the commercial production of oil by Reliance Petroleum, I expect a spate of positive news flow from both groups. It would be safe to say that investment in select companies will reap good dividends and capital appreciation.
I was hopeful of publishing a few research reports before year-end but am thoroughly infected with the lazy feel the season infests you with! Currently curled up in my blanket, listening to music and ready to doze off!
So I'm pushing off to my bed now; for those interested in a detailed analysis of a specific sector, leave a comment on the blog or mail me.. I'll get back to you asap!
Saturday, December 29, 2007
Thursday, December 27, 2007
Bhutto's assassination - A jolt from the blue!!
The last few days have seen the markets celebrate XMas and welcome the New Year with some gusto; a sense of false belief, hope and promise had seeped into the investors that the bull run may continue well into the New Year! The market had priced in almost all the macro- and micro economic factors but one thing which the market hadn't bet on was political instability!
The assassination of Benazir Bhutto today @ 6:45 p.m. in Pakistan took the world by surprise. The U.S. government had spent a lot of money and time on reconciling the differences between Bhutto and Musharraf! However, some one sitting somewhere else decided to provide a twist in the tail, a twist that Pakistan least wanted at this moment! The emergency had been lifted only a fortnight ago; however, the assassination of Bhutto casts a lengthy shadow on the Presidential elections due to be held early next year.
I'm not a political writer, hence I'll nnot indulge in the cascading effects her assassination will have on the region's political scenario. But one thing for sure, I don't expect the markets to take the loss lightly! Expect a downward move in the market tomorrow; suddenly everything does not look all that rosy! Gold prices may again start moving northwards for investors will flock to gold to hedge their risks!
In early trades, the Dow Jones was down around 1 percent; expect a heavier correction in the Indian markets! I would expect a 500 point downward move or more when markets open on Friday! It'll be a good time to exit the profitable positions; re-enter the market at slightly lower levels!
The assassination of Benazir Bhutto today @ 6:45 p.m. in Pakistan took the world by surprise. The U.S. government had spent a lot of money and time on reconciling the differences between Bhutto and Musharraf! However, some one sitting somewhere else decided to provide a twist in the tail, a twist that Pakistan least wanted at this moment! The emergency had been lifted only a fortnight ago; however, the assassination of Bhutto casts a lengthy shadow on the Presidential elections due to be held early next year.
I'm not a political writer, hence I'll nnot indulge in the cascading effects her assassination will have on the region's political scenario. But one thing for sure, I don't expect the markets to take the loss lightly! Expect a downward move in the market tomorrow; suddenly everything does not look all that rosy! Gold prices may again start moving northwards for investors will flock to gold to hedge their risks!
In early trades, the Dow Jones was down around 1 percent; expect a heavier correction in the Indian markets! I would expect a 500 point downward move or more when markets open on Friday! It'll be a good time to exit the profitable positions; re-enter the market at slightly lower levels!
A dismal surrender..
What a day one India had on their tour of Australia! Led by their captain, Anil Kumble who turned in a fine spell taking 5 wickets for 84 runs, India did pretty well to shrug off thier first-day overseas tour blues and bundle out Austrlia for a paltry total of 343! Paltry, if you consider the last series where Austrlia walloped Sri Lanka batting first!
Any chances of India gaining a good first innings lead were blown off by some tepid batting and a disciplined bowling performance from the Australia bowlers, led by Stuart Clark! Apart from Ganguly and Tendulkar, no one really seemed interested in fighting it out, though I must say, Laxman was surprised by a brute of a delievery from Lee.
Excuses be damned, where does this leave India? India are left staring at a mammoth 147 run first innings deficit! I don't want to write off India just now but unless Kumble can inspire another breathtaking display of bowling from his young men, Australia seem to be running away with the first Test! Ciaoooo..
Any chances of India gaining a good first innings lead were blown off by some tepid batting and a disciplined bowling performance from the Australia bowlers, led by Stuart Clark! Apart from Ganguly and Tendulkar, no one really seemed interested in fighting it out, though I must say, Laxman was surprised by a brute of a delievery from Lee.
Excuses be damned, where does this leave India? India are left staring at a mammoth 147 run first innings deficit! I don't want to write off India just now but unless Kumble can inspire another breathtaking display of bowling from his young men, Australia seem to be running away with the first Test! Ciaoooo..
The Santa Claus Rally
This is a copy of the article published in today's edition of the Economic Times:
MUMBAI: If you are looking for reasons pointing to the surge in equity markets and can’t find any, well then try an unconventional explanation.
Go back to history, if the last ten years data is to go by, the markets have posted positive returns, or in other words rallied in the last week of every year. Further, FII inflows have also been positive during the same period, contrary to popular belief that they usually stay away from the markets due to holiday season.
The gains in the last week of every year can be called a ‘Santa Claus rally’, though in Wall Street terminology. A Santa Claus rally refers to a jump in the prices of shares in the week between Christmas and New Year. In the US, there are several explanations for this phenomenon. Some of them relate to tax considerations, plain happiness around the street or also the fact that a lot of people are on vacation that week.
There are no definite explanations for such a situation in India but there has been a rise in the markets between Christmas and New Year every year since 1997. Data to study this phenomenon in India was available since 1997 only as prior to that the markets remain closed the week after Christmas.
The highest gains during the same period were posted by Sensex in 2003, which is 3.5%. Similarly, the highest net FII inflow also has been during the same year. However, data suggests that this not due to FII inflow alone as even though in 2006, the net FII position was negative, the markets gave a return of 2.3% during the same period. For the past four years, markets have gained handsomely during the same period, followed by strong FII inflows (expect 2006).
Even if we go by today's market movement, Sensex surged 3.6% to close at 19,854 points, which could be a precursor to the rally over the next few days. The provisional FII data stood at Rs 176 crores, according to NSE provisional figures. It is to be seen whether in percentage terms, Indian equity markets are able to see its best rally this time. In the same period last year, the Santa Claus rally raised the market by 2.3%.
Many analysts believe that the rise during such a period is more in anticipation of a strong performance in the early months of the new year as it is believed that there is always a lot of action in the period surrounding the budget. They also attribute this rise to beginning of the pre-budget rally.
MUMBAI: If you are looking for reasons pointing to the surge in equity markets and can’t find any, well then try an unconventional explanation.
Go back to history, if the last ten years data is to go by, the markets have posted positive returns, or in other words rallied in the last week of every year. Further, FII inflows have also been positive during the same period, contrary to popular belief that they usually stay away from the markets due to holiday season.
The gains in the last week of every year can be called a ‘Santa Claus rally’, though in Wall Street terminology. A Santa Claus rally refers to a jump in the prices of shares in the week between Christmas and New Year. In the US, there are several explanations for this phenomenon. Some of them relate to tax considerations, plain happiness around the street or also the fact that a lot of people are on vacation that week.
There are no definite explanations for such a situation in India but there has been a rise in the markets between Christmas and New Year every year since 1997. Data to study this phenomenon in India was available since 1997 only as prior to that the markets remain closed the week after Christmas.
The highest gains during the same period were posted by Sensex in 2003, which is 3.5%. Similarly, the highest net FII inflow also has been during the same year. However, data suggests that this not due to FII inflow alone as even though in 2006, the net FII position was negative, the markets gave a return of 2.3% during the same period. For the past four years, markets have gained handsomely during the same period, followed by strong FII inflows (expect 2006).
Even if we go by today's market movement, Sensex surged 3.6% to close at 19,854 points, which could be a precursor to the rally over the next few days. The provisional FII data stood at Rs 176 crores, according to NSE provisional figures. It is to be seen whether in percentage terms, Indian equity markets are able to see its best rally this time. In the same period last year, the Santa Claus rally raised the market by 2.3%.
Many analysts believe that the rise during such a period is more in anticipation of a strong performance in the early months of the new year as it is believed that there is always a lot of action in the period surrounding the budget. They also attribute this rise to beginning of the pre-budget rally.
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