At the outset let me wish all readers of the blog a "Happy and Prosperous New Year 2009". Last year all markets have seen their all time tops, heaviest falls and highest volatility amidst the confirmation of Global recession too. Rupee gyrating between 39.70 and 50.70 is another feature catapulted Indian Economy, businesses and Industry too, due to huge surge in Crude Prices to $ 147 and the steep fall to $ 37 recently. Evey thing happening in just a matter of year goes down the history as some thing phenominal, leaving every one guessing how year 2009 will unfold?
Well I said that let us see How Dec' 2008 closes..Sensex above 10000 and Nifty above 3000. It missed by few points as on 31.12.2008. However, today Nifty managed to close above 3000, though Sensex failed to even touch 10000 level today, leaves some hope for minor rally from here on! The worst for markets is over, however, some base building - cum - consolidation has to happen during the first half of this year, flushing the excesses in the system, leaving the economies to recover, and businesses to adjust to the new challenges.
When Obama takes over as president of US on January' 20th this year, he has lot of problems to address for US economy and on global front too, as the tension in middle east might once again disturb the crude prices, which have raised 14% in just a day. Our country will face general elections to Paraliament, where whether UPA or NDA will be able to muster strength to push through the economic reforms azenda, without hinderance from leftist parties, will give push to the confidence of markets. For the present the inflation, interest rates, commodity prices and real estate prices have cooled and we can expect some better conditions from second half of this year.
The issue of outstanding Participatory Notes issued by FIIs winding up by 31.03.2009 will give one more steep volatility for our markets, which might force them to revisit the lows made on 27.10.2008. Barring this, our markets should perform well but in side ways mode during the first half and some bullishness can be expected in the second half.
One thing is certain to be remembered is that equity markets world over including ours are in deep bear grip and any rallies will be sold into, by the trapped investors and bulls. The next bull market is quite far away! Careful systematic investment in to blue chips on every dip from here on with a view to hold for 5 to 10 years will give substantial returns patient investors.
