110309 – We are writing after a pretty long time hence firstly let’s see a line which we had mentioned in our last MFF article… “If Sensex does not hold this level for two days we are all set to test 17300-17000 in coming days” The fact is we touched a low of 17295.62 and have bounced almost 1000 points. The ride anyways has not been a smooth one. In last two months we have done numerous investor awareness programs and thus sometimes life just gets too hectic.
– Life also has been hectic for the government over last few months, ofcourse for their own wrong policies. Our last article had reflected our anguish over various things happening in the country, the anguish is the same that of what every Aam Aadmi of India is feeling today. Things from that point of time have not improved in any way even today. The market had greatest fear that budget session of the parliament may not run but the government finally budged and the markets turned positive.
– Markets again had great hope from the Budget. The event turned out to be a complete wash out and a non event. The biggest +ve in the budget was that there was nothing negative which could have further spooked the markets. The market and the industry as a whole had actually factored in a 2% rise in excise and service tax rates, which did not happen and thus we saw a 750 pts rally on Sensex in two days. But the euphoria has died down within few days as people have realised that not much has been done and the budget infact is negative for some sectors.
– The worst thing in the budget is levy of Tax on Health Care. There is no roadmap on how the fiscal deficit would be tackled. Read the article of Mr.Gurumurthy which we have posted on the site here. He is an emminent economist and writes after a deep research. The article will throw light on how things are not the way they are being portrayed.
– Thanks to Supreme Court on how it has been pulling up the wrongs in the country. Untill yesterday he was unknown but today everyone knows Hassan Ali Khan who is supposed to have almost looted the country with 40000 Crs just in taxes, if we are right. All Indians who has looted our mother land should be booked and only this money can actually easily bring down our fiscal deficit. Govt. know this hence let’s hope things take up the right track.
– Market again got spooked after the coalition problems in TN which thank God has been resolved. But now we need to be careful on what Ms. Mamta Banerjee may do in West Bengal. We may see similar problems to be handled by market again!
– Inflation still remains a problem, but Crude is the biggest threat to the market. $105 a barrel is just a synonym to panic! Thanks to the elections in 5 states we may not see an immediate big jump in the fuel prices. Diesel prices need to be de-regulated atleast to some extent. A mechanism is required where in Trucks and Lorry’s carrying essential items are spared and all other vehicles specially the cars and suv’s are charged market linked rates.
– Sensex & Nifty may remain subdued for rest of the month. The DOW Jones is reaching a critical resistance area os 12800-13200 and may not break it very easily. A faster growth in US and EU region will keep the flows checked into emerging markets like India. One would prefer safer destination for investing their money.
– We would soon start hearing the Advance Tax numbers and that would set the tone on how the co’s may perform in the coming financial year. The corporates in India are matured and have been doing well in all kind of scenarios. The market has punished some of the stocks out of shape and hence Sensex requires a little policy push from the government.
– Every firm word followed by action can lift the global sentiment towards India. We remain bullish on Pharma, Banking, Health Care (inspite of Service Tax levied), Auto, Education.
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