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News Analysis


23/11/2011
Nearly two-and-half months ago on 15th September, 2011, I wrote about coming FINANCIAL EARTHQUAKE. Finally, we find the financial tremors in place before this earthquake. Today's close of SENSEX under `15700' confirms all possibilities of CAPITULATION in Indian stock markets and I'm sure across global markets refreshing memory of Lehman 2008 crisis. Capitulation of such degree occurs where market loses significant value in very short time with no underlying support. While not a single sector (even FMCG or Pharma) exhibiting motivating trend in Indian Financial Market, they are all battered in this market with unprecedented bearishness. AAA to CCC - In our earlier article, we have written about US default and European debt crisis. Since our writing, a lot has occurred including toppling of political governments in five European nations. What is surprising to note that the current global crisis roots origin from countries which were otherwise rated either AAA or CCC (debt credit rating) covering both extremes and contributing to macroeconomic environment in their own ways be it external deficit financing or lavish expenditure. Many unfolding events as of this writing are occurring on US deficit financing and execution plan for solving European debt crisis. Despite this, there are some countries relatively better insulated from current crisis, we will write about the same later on. INDIAN RUPEE OUTLOOK - RBI's relaxed view on deteriorating US dollar exchange rate probably indicates more is yet to be seen. In purview of protecting future (major) financial market damages and possible bank hoarding for US dollars, RBI's stance for no action (rather inaction) gives a freefall path for rupee to slide beyond 57 levels in coming days. ON THE POSITIVE NOTE - Yes, there will be widespread damage in current financial market at least for the coming months. However, during this disruptive cycle, it also provides an attractive opportunity to find and invest (or add more) blue chip stocks going for song to your portfolio that you desired to own. Mihir Sandesara - www.money-maker.co.in


Source : MySmartStocks.com