Indian Economy - Global Markets

Hi readers!

I have been away from the markets since engaged in project consultancy work for quite some time, was not updating the blog. Much water has flown down the stream in the past 3 months, since I wrote last time. There is a stable progressive looking Government under the dynamic leadership of one of the most revered economist Dr.Manmohan Singh on firm saddle as Prime Minister of India. The blackmailing and back seat driving forces of earlier coalition government are out, was a big relief to investors and markets, which saw Indian bourses locked up in upper circuit during May'2009, for the first time. In fact when circuit filters were introduced I was wondering whether the upper circuit could be seen??? But it happened so easily, that is the power of money, confidence and sentiment.

This brings us to the basic fact of investing in stocks...how and why stock prices move up or down. It is the sentiment, power of money (liquidity) and confidence of the investors which move either way. Investing is an art and to some extent is science but not mathematics.

Indian Economy has been stable, though slowed down from the growth path, did not suffer from the danger of recession etc., as being witnessed in developing economies. When the correction started in January 2008, I was writing in the blog since then, that March' 2009 would be the deadline for completion of correction, which also happened on dot. Well the bear phase has ended by March, but it does not guarantee the "Bull Run" witnessed in 2005-2008, immediately. Markets are adjusting to the new dynamics, and the stocks and sectors will have the reasonable, realistic valuations. The next bull phase shall be after 2011 or so., Till then the markets will be in a large trading range of 7000 to 21000, which itself will give huge bull rallies and bear hammerings, which only professional technical experts will be able to catch and trade.

It is wise to pick up dividend paying stable infrastructure stocks, banking, commodities stocks etc., in these uncertain times. People started wondering whether 21000 could be taken in this bull run? There are people arguing that Crude which bottomed out at $ 34 and hovering around $68 currently, would again challenge previous all time high of $144???? If that happens, when ever, certainly Sensex will challenge 21K too, since Oil is a major component of our indices.

For now, the fears of prolonged recession in US and UK appearing to be waning away, if that is true, shall be good news for Global markets. As far as Indian Economy is considered, the fiscal situation is worrisome, and how fast the government tightens its own belt and manages the deficit, will show its impact on every walk of life. What has been shattered in a period of one year cannot be built in months. Naturally, time is the essence, and I am confident that things will improve with times, and only patient investors will get most benefit in these uncertain times.

Happy investing!