Finally Government has pulled up their socks and came with a bold, comprehensive package for saving the PSU oil marketing companies, from the crisis. The hike in prices of petrol and other products is being expected and discounted by the markets for the past one week, which is evident in the strength of 3 PSU majors..viz., IOC,BPCL and HPCL. While central government preferred to take some hit due to reduction in Excise duty, Customs Duty, suggested state governments too to forego some sales tax/VAT to give relief to consumers. The hike of petrol by Rs.5/- Diesel by Rs.3/- and LPG by Rs.50/- will directly affect consumers, goods and services and inflationary. The other measures which widen the fiscal deficit further also will affect the growth of the economy and push inflation. These measures should have been taken some 6 months ago itself, and due to political compulsions of UPA the decision is delayed. This delay neither helped it to gain any strength too, and now reached a 'do or die' situation, where we must appreciate the courage of PM to set right the things.
Nifty and Sensex opened in positive territory initially, and as the announcement came around 12 noon by Petroleum Minister, the volatility has set in and there was huge dumping of stocks including oil marketing companies, which are beneficiaries of the decision going forward, as european markets opened weak, and US futures indicated negative opening for those markets. In the process, Nifty broke 4600 and closed below it finally. Sensex too closed at 15514.79 below march closing of 15644.44 which was indicated in yeserday's posting. The markets are now in firm 'bear grip' and every rally will be sold into from now on, by trapped bulls. VIX has closed at 29.82 indicates the volatility to continue further. Singapore Nifty futures are currently quoting at 9 points premium, and Crude has cooled to US $122 should give some comfort for the markets today, which have already posted 5 to 6% losses already during this week by now.
Range for the Day: Nifty might trade in the range of 4500 to 4700.
2 comments:
Even Udayan Mukherjee is talking about markets testing newer lows (below jan and march lows) of 4445 on nifty. So, I think, with this much of pessimism, markets can't go down drastically from here on. Also, major heavyweights like ONGC etc, would also recover now. What is your view on this?
Regards,
V
Well Nifty and Sensex have broken all supports during this month, by yesterday and closed below March closings. We are in a long term bear market which might last another 12 months from now.
However, this is a bear market, within a multi year bull market started in 2003, where sideways movement will be there, as stocks and sectors adjust to the uncertainities on economic growth, inflation and interest rates etc.,
The range of nifty can be as wide as 4300 to 6300.
bkvrkrao
Post a Comment