The Sensex tumbles down again!!

The 30 Securities' Sensitive Index 'Sensex' of the BSE tumbles down again by 366 points (3.14%) to close at 11328 mark. This was a consequence and the result of the fall of DOW by over 5%. FIIs are taking their money back from the Indian Markets to support the US economy in maintaining the liquidity. This resulted in the lack of liquidity in the Indian Financial markets.

The sensex opened at 11245, 450 points down from the previous close and reached as low as 955 points down
from the prev. close. It was the FM and SEBI's positive statements that restored the confidence to pull up the Sensex to the point of its closing.

This liquidity crisis is expected to remain untill the US financial crisis is not over and the FIIs are ready again to invest in India. But Indian need not to do panic because the India is not going to suffer for a long time. This is the time to keep patience and watch for the markets to stabilize a bit. This fall has also come with it the opportunity to invest at cheaper and more attractive prices.

But a period of atleast 2 years or more should be considered for the investment in the market. Those who have some quality stocks in their portfolio need not to worry if and should have a long term perspective. And if someone who has already liquified his holding should keep the cash till this downfall stops. However if someone feels if the market will not fall beyond the current level he can invest in quality stocks. But to avoid losses smart investing is needed. Go with the Infrastructure, cement stocks and the stocks of the companies whose product is an industrial product. Entertainment indusrty is also expected to do good in future and the evergreen Oil and Gas Industry can also be viewed as the possible avenues to invest in.

The thing to remember is that the only 'Success Mantra' at the time is to be 'Carefull' and 'Invest Smartly'.
Good Luck

Sensex at its Two Year Low!!

It was only the January this year when every one including the top analysts of financial markets have said that the Sensex will touch 25000 mark by the end of year 2008. But the markets almost fooling everyone not only did not move further but also touched its two year low by date.
What are the reasons behind this surprising behaviour of the Indian Financial Market? To me one reason is that Indian Retail Investors' being emotional decision makers. They overreact almost in every situation whether favourable or unfavourable. Another reason I sought, the most important and still overlooked by all, is the US Subprime Crisis. While it was proven that the 5 year long US Infrastructure spurt was a bubble and not a boom, Retail, as well as Institutional Investors kept on investing heavily in India (December, 07).
Another reason can be attributed to the fall in the margins of the Indian IT majors. This is very important to remember that IT companies play a great role in contributing to the foreing currency reserves of India. While, it were the IT companies who set this upward trend for the Sensex which was later caught by other industries too. And again with Indian Rupee Streangthening against US dollar with a signal of reccession in USA it were the Indian IT companies who started to be affected adversely at the first place.
But we missed to pay the attention it needed.
Well whatever be the reasons those who have booked losses can not go back in time. The only way to deal with this problem is to be more fundamentalist and less technicalist in nature. Only selection of fundamentally good securities and keeping it until good times come again with patience can benefit in long term.
For investors who still bag some money with them this is quite a nice time to invest in the Indian Market. The prices are very attractive and valuations are low enough. But again the quality of the stocks must be considered. And this is no good time for short term investing. Day Traders must keep them away from market at the moment untill it achieves some stability especially those with low turnovers.
Let's hope the good (atleast; if not the best at the moment) for the future and may this Diwali come with light for the Indian and Global Financial Market.

Upcoming Elections and Political Drama and the Roll of Media

India is once again (after five years) under the clouds of political uncertainty. And all the political parties are trying to get the attention of the voters. Each and every news, whether big or small, good or bad will be used as a weapon by these so called leaders(?) and common man will again have to do the same thing - voting as per his own judgement. Under these circumstances I think the Indian Media will play a great and an important role in guiding the public to chose the right(?) option. In my opinion Media especially Electronic Media has a great influence on Indian Public. And this a common fact that the public do have faith on the media.
In this scenario media (of all type) should ensure the quality and truth behind the news and it should not publish a news jsut to publish a news but a news should creat public awareness and it should be free from any ambiguity.
At the same time the media should also ensure that no wrong message is sent to the public however true it may be. Hence there is a lot of responsibility on the media's part and at the same time its also the duty of the 'Watchers' that they become more aware to see the truth around them.
One should not just waste his vote by voting to a person who does not care for the public interests.

Petrol and Diesel Price Hikes in India

Recently we saw a much debated Petrol and Diesel Price Hikes in India. What is the reason behind the continuous price hikes in petrol and diesel? Some find the government policies responsible for some other relate this price hike to the global scenario.
But I think the price hike is correlated not only with both government policies and global economic environment but also with some other factors. It is not that government is not responsible for it but its actions just added more to the inflationary environment and thus the crisis. The factors besides government policies and global cues are - Increasing Cost of Living of an Average Indian, Population, Increasing Dependency on Petroleum for Energy Production.
Government's actions were also questionable and were focused to the upcoming General Elections which made the conditions even bad.
And the Global Scenario of inflation (Crude Oil touched its all time high $125 per barrel) work like the fuel in fire.
So to curb this inflation every and each person should act responsibly. While the government should stop to take decisions that are harmful in long term just for the sake of public fame, individuals should behave in a smart way in using energy whether in the form of petrol, diesel, carosine or in the form of electricity.
Come on India. This is the Real Show Time.

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