Monday, 6 October 2008

Support for Sensex at 11150: Gaba

BSE Sensex (11802): The market cracked and has closed below the all-important support of 11900 but has yet still managed to close above the crucial support of 3566 and so a bounce is possible in this down move.

The support for the Sensex is 11150 and the resistance to the up move is at 12382- 12783.

Nifty (3602): The support for the Nifty is at 3566-3401 and the resistance to the up move is at 3758-3790-3867.

Source: MoneyControl

Six tips for small investors when markets fall

NEVER forget that what goes up, must come down.

This rule, I believe is the cornerstone of a successful and contented life. A sudden rise in the stock indices may have you smiling from ear to ear. It's the slide that tests your real strength.

And if the current slide makes you feel timid, wealth gives you these six tips.

1. Hear no evil
Forget about rationalising and explaining (or listening to other people explain) why stocks are falling. It's a pointless exercise.

2. Remember the bad times
File the experience away as a worthwhile reminder of how risky the stocks are. Draw on that memory during the next market boom when optimistic market seers tell you that stocks are not risky.

3. Don't wait it out
If you believe, based on your preferred market measure, that stocks have over corrected, don't wait for the correction to end. In my case, I was investing in 1997 through 2008 -- it had nothing to do with the equity markets. It was a conviction that long-term monies should be in equities. So, if I have long-term money, it goes into equity, other wise it goes into a money market mutual fund.

4. Be contrarian
Recognise that even if you are right about the market overcompensating for past mistakes, there will be months of pain before the gain. Being a contrarian is easy on paper but much tougher in practice.

5. Change of perspective
Markets will go up and go down -- you cannot change that. You can change the way you look at it. When you have money you will invest, when you need money you will sell. There is no call to action based on 'what the market will do'. So that does not matter.

6. Get real!
Console yourself with the recognition that the professional portfolio managers and the market experts you see on television are staring into tele-prompters not crystal balls.

These tips should keep you afloat even if things go from bad to worse. And when they do, here is another rule for you to remember : No Matter How Bad things are, remember they can always get worse! And on that happy note, I shall bid you goodbye.

Source: MoneyControl

Sensex loses 41% in 2008

It was shocking day of trade for the Indian equity markets as the BSE Sensex has lost over 5%. Year to date, it lost over 41%. On January 1, 2008, the Sensex was around the 20300 mark and today it is trading at 11858.

Year to date, Realty was the worst performer sector among all sectoral indices; it slipped over 76%. Sector like metal, power, capital goods indices have lost over 50% from January 1, 2008.

Source: MoneyControl

Market crash: What should you do now?

WHEN the going gets tough, the tough get going.
-- Billy Ocean, singer.

That really sums up what it takes for a retail investor to survive in these volatile times -- nerves of steel and lots of courage. If you have poured in a substantial amount of your savings in equity shares or equity mutual funds, and are crumbling under the pressure of the falling markets, all is not lost. We spoke to some of the best financial advisors in the country and they tell you why you should simply not worry!

Stay put for the long-term
Our experts have said it before and they say it again -- equities are for the long term. Certified Financial Planner Gaurav Mashruwala says, "Anyone who has been investing for the long-term should not be affected by the market fluctuations. By long-term I mean seven to nine years."

Financial advisor Sanjay Matai elaborates by saying, "People should continue holding their investments. The current fall has been too sharp and it will take some time for the market to recover. The pain will be longer this time but the market will recover."

Remember: a loss is not a loss, till you sell. So, do not panic by simply looking at the notional loss. Hold on to your investments and watch them turn to profits in the long run.

Why the 'long-term' argument pays
Some number crunching supports this. If you had invested in the BSE Sensex for a one-year period between 1979 and 2005, in 10 out of those 26 years, you would have lost money (see table).

But if you had stayed invested for more than 10 years, your chances of loss would be almost zero. And that too, you would have made an average return of 17 to 18 per cent per annum.

For those who thought equity was a place to make a quick buck, it is time to revisit this belief. If your goals are any shorter than five to seven years, then you should evaluate your investment avenues. Debt is a better bet for short-term investments when you are looking at steady returns.

Source: MoneyControl

Dow closes below 10K first time in 4 years

In the US markets, the Dow Jones closed below the psychological 10000 mark for the first time in 4 years on fears that the credit crisis is spreading its tentacles across world markets. The index however pared its massive losses in the final hour of trade.

The Fed tried to ease Wall Street's pain by saying that the 28-day and 84-day cash loans being made available to banks will be boosted to $ 150 billion a piece, effective Monday. Also loans that will be made available in November to banks also will be increased to $ 150 billion each.

That makes a total of $ 900 billion in credit potentially outstanding over year end. But the US markets didn't find much respite and slumped.At closing bell, Dow Jones ends down 369 points, S&P 500 sheds 42 points and Nasdaq ends down 84 points.

Source: MoneyControl

Time To Invest In Indian Real Estate

There’s a famous saying by one of the world’s most opportunistic investors. A man named Baron Rothschild always advised that “The Best Time to Buy Is When There’s Blood on the Streets”. In today’s economic scenario that saying could not have been truer. If you’re an investor who is willing to put your money in the stock markets and wait for a while then chances are that your wait will be rewarded with excellent returns once the economy gets back on track. One sector you might be interested in investing is the Indian Realty and Real Estate Sector.

The Real Estate sector is one sector that is indicative of the economic situation of the country. We know that all economies move in cycles. There are Booms when the economy and the stock markets are flooded with money. People are optimistic and growth takes place. What we are now seeing is the exact opposite of that called the Recession where people are afraid to invest in the markets and start saving money.

Those already invested are removing their money out of the markets in order to cut their losses and that’s the reason why the Sensex is hitting a new low everyday.

So if you are interested in investing in the Indian growth story via the equity or share market; this is your chance. One must remember that this scenario has been applied to the long term investor-a person who is willing to stay invested for a long time. In the case of the Real Estate sector this could well be worth a wait of 2-4 years, maybe even more.

But if you’re willing to do that then you should be rewarded because the Indian economy despite a recessionary trend is expected to grow at 7% this year alone.

The Sensex crashed today by 700 points and has been falling for quite some time. The biggest losers in this bear run have been the Real Estate sector and the Banking sector. Incidentally these were the same sectors which were doing well when the Sensex was booming last year. Indian Real Estate companies have become heavily undervalued and their shares are being sold in the market for prices which you will not see for a long while.

While investing in Indian Real Estate companies always bear in mind:

· That you have enough information about the company.

· Make sure that their order books are full of projects which will keep their revenues coming in even if they don’t get newer projects along the way for some time due to the current economic crisis.

· Make sure that they have good financial backers and are supplied with credit for at least some time to finish their projects.

· Take a look at their revenue and check if they’re growing and that they haven’t stagnated.

· Their top brass and management are competent enough to see them through these times.

If however you have the cash at hand and don’t want to take the risk of investing in equity you may even want to invest in land directly. Real Estate prices across India have come down so a piece of land or an apartment you can sell later for a higher price isn’t a bad idea.

[Disclaimer: Investing in stock markets involves a person taking a considerable amount of risk. The above article is only of an advisory nature.Statements related to companies and businesses have been made on past performances and do not necessarily indicate their future behavior because economies and markets are of an uncertain nature. Neither the writer nor the site can be held responsible for any action(s) of the reader based on this article.]

Source: theindiastreet

Market outlook and day trading ideas for 7th Oct.

Yesterday US markets cracked badly. Dow has broken its 5 digit mark almost after 2004. It is within 10K now.
Yesterday RBI cut CRR by 50 basis points to increase liquidity in the system. Although RBI stated it as a temporary measure, it is an aggressive timely measure by Reserve Bank of India. Interest rate sensitive stocks will react positively to this news. This would be effectiable from 11 Oct.Though this a good news for the Indian markets we could have rallied today but US markets cracked.
I think we may have a flat to negative opening.
It is advisable to trade minimal.

Intraday Ideas.
Austral Coke & Projects.
Buy above 197 for targets of 205 , 209 & 213.
Sell below 184 for targets of 179 , 175 & 171.
Punj Llyod
Buy above 247.30 for targets of 253 , 256.
Sell below 235 for targets of 230 & 227.50 .
Larsen & Tubro.
Buy above 1100 for targets of 1131 & 1152.
Sell below 1051 for targets of 1029 & 1010.

Source: indianmoneyplus

225 stocks hit all-time lows

The Monday bear haemorrhage pushed as many as 225 stocks to hit their new lows on the BSE.

Prominent stocks among them include some of the A-group stocks such as MTNL, Indian Hotels, Deccan Chronicle, Suzlon Energy, Shree Renuka Sugars, GVK Power, Parsvanath Developers, Indiabull Realestate, DLF and HDIL. The other stocks that touched their new lows were Kotak Sensex, an exchange traded fund from Kotak Mutual Fund, ICRA – rating agency — and Edelweiss Capital.

The new lows’ list was dominated by realty counters.

FIIs have been selling quite heavily from the market, particularly in the last two days, as the credit woes spread to European markets. After pulling out Rs 1,662 crore-worth equities on Friday, the FIIs (net) sold Rs 1,169 crore in Monday’s trade, according to the provisional data available with the stock exchanges.

Circuit summary also captured the bear grip with 449 stocks hitting lower circuit, against 55 stocks that touched upper circuit filter.

Of the 2,677 traded, only 281 or 10.5 per cent ended in the green in the BSE while 2,369 stocks ended in the red; 27 stocks remained unchanged.

Source: Hindu Business Line

Day Trading Guide - 07th October 08


Initiate fresh long-position if the stock moves above Rs 505 with stiff stop-loss.


On Monday, the stock witnessed steep 5 per cent fall and the relative strength index has entered into the oversold region. Buy the stock in dips with tight stop-loss at Rs 1,275.


The outlook remains positive as long as the stock trades above the key support level of Rs 1,050. We recommend a buy with stop at Rs 1,050 level.


Avoid trading in this counter for the session.

Reliance Capital

The near-term outlook is bearish for the stock. Fresh short-position can be initiated if the stock declines below Rs 958 level with stiff stop-loss.

Reliance Communications

We recommend a sell in this counter.

Reliance Industries

The stock plunged almost 7 per cent accompanied with high volume in the last trading session. Sell the stock in rallies with tight stop-loss at Rs 1,750 level.

Satyam Computer

The stance is cautious for the stock. Desist trading in this counter for the day.


Initiate short-position if the stock reverses from the resistance level Rs 1,500, with tight stop-loss.


Buy the stock in declines with stop-loss at Rs 600.

(Note: In a buy recommendation, the resistances would be the targets and the nearest support would be the stop loss; In a sell recommendation, the supports would be the targets and the nearest resistance would be the stop loss; The recommendation would be valid for today's trading only.)

Source: Hindu Business Line


CMP: Rs 583.30

We recommend a sell in BEML from a short-term trading perspective. It is clearly visible from the charts of BEML that it has been on a downtrend from its December 2007 high of Rs 1,849. Since then the stock has been forming lower bottoms and lower peaks.

However, during July the stock found support at Rs 600 and made a corrective up move to Rs 845 levels. After encountering resistance around Rs 845 in early September, the stock resumed its downtrend. On October 6, the stock tumbled 10 per cent with above-average volumes, breaking through the key support level of Rs 600. BEML is trading well below its 21- and 50-day moving averages.

The daily and weekly relative strength indices are featuring in the bearish zone. Moreover, the daily moving average convergence and divergence is declining in line with the price in the negative territory. Our short-term forecast for the stock is negative. We expect the stock’s downtrend to prolong further until it hits our price target of Rs 522 in the upcoming trading sessions. Traders with short-term perspective can sell the stock while maintaining a stop-loss at Rs 613.

Source: Hindu Business Line

Indian-American given job of saving Wall Street

A 35-year old Indian-American whiz whose parents migrated from Jammu and Kashmir is being entrusted with task of rescuing Wall Street, the US economy -- and the pretty much the entire financial world tied to its coat tails -- from a dizzying tailspin that is crushing markets and people across the globe.

US Treasury Secretary Henry Paulson on Monday named Neel Kashkari, currently the Assistant Secretary for International Affairs in the Department of Treasury, as the interim head for its new Office of Financial Stability, including the Troubled Asset Relief Program, to oversee the $700-billion bailout program aimed at arresting the US economy's precipitous slide arising from the mortgage crisis.

Kashkari is one of nearly half-dozen Indian-Americans, including Louisiana Governor Bobby Jindal, who have served in the Bush administration at Tier Two cabinet levels. But the new job clearly puts Kashkari in a different league altogether.

A long-time understudy and associate of Secretary Paulson going back to their days at Goldman Sachs, Kashkari was nominated as assistant secretary and confirmed by the Senate only in July this year in a little-noticed development at that time because it came at the tail-end of the Bush administration's eight-year run in office.

But the monumental crisis that has spooked Wall Street and the associated world has thrown the young Indian-American engineer-turned-financial expert into the spotlight. Hours before the appointment, the financial world and blogosphere was agog with the news of such a young man being tasked with such a huge task on a day the market continued its downward spiral.

Source: EconomicTimes

Breach of earlier 2008 lows a major setback

Here is a verbatim transcript of Udayan Mukherjee’s comments on CNBC-TV18.

We saw that as 12,000 broke, there was a little bit panic in the market but the bigger break has happened earlier - the breach of the earlier 2008 lows which held after four attempts and those slicing through - that I think was the more important breach. So these are psychological levels which can come and go without much resistance - they are optical and psychological in nature but 12,500 which held out for so many months and 3800 which had held out for the Nifty - those getting broken so conclusively I think is the stuff which is leading to a lot of panic in the market, because now the serious downsides have opened up.

The earlier assumption that the market would still hold out in the range of 3800 to 4500, that notion has been broken down completely and therefore I think stop losses have got triggered but the bigger factor is the kind of large institutional delivery-based selling which we are clearly seeing in many largecap names and once that becomes the play where institutions are actually selling heavily - they don’t have so many levels in mind. Levels only come into play when there is not huge institutional activity and the market is actually being moved around by traders and large domestic players who are moving with technicals.

But I think the kind of selling that we are seeing from the last few days from global institutions - those guys I think don’t have any respect for either 12,500 or 3800 or Rs 1800 for Reliance - they just want to liquidate and take out a certain amount of cash from the markets, which is why the levels have become quite les important, but the one level which certainly affected sentiment quite a bit was the breach of 2008 - the early lows of 3800.

Source: MoneyControl

Buy Cairn India, target of Rs 287: Karvy

Karvy Stock Broking has upgraded its rating on Cairn India (CIL) from outperformer to buy with a target of Rs 287 in its October 6, 2008 research report. "We believe that the market has become overly negative on CIL due to the recent fall in crude oil price in dollar terms. We maintain our valuation of CIL (including DCF of Rajasthan block) at Rs 287 and upgrade our rating on the stock from Outperformer to BUY in view of the recent slide in the stock price," says Karvy Stock Broking's research report.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

Buy Plastiblends, target of Rs 220: LKP Shares

LKP Shares has recommended a buy rating on Plastiblends India (PIL) with an 18-month target of Rs 220 in its October 4, 2008 research report. "Given the scalability of the business and the ROI we believe that PIL is well placed to achieve critical mass in masterbatches during the next three years and the stock trading at 3xFY'11E with a dividend yield of 5% is an exciting small cap pick. We recommend a BUY on the stock with an 18-month price target of Rs 220," says LKP Shares' research report.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

Buy Indiabulls Real Estate,tgt of Rs 275: Kotak Institution

Kotak Institution has initiated a buy rating on Indiabulls Real Estate with a target of Rs 275, reports CNBC-TV18.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

Buy Provogue above Rs 146: has recommended to buy Provogue (India) above Rs 146 with a stoploss of Rs 145 and targets of Rs 150/165/higher.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

Buy Gokul Refoils above Rs 241.50: has recommended to buy Gokul Refoils and Solvent above Rs 241.50 with a stoploss of Rs 240.50 and targets of Rs 245/250/higher.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

HDFC Securities positive on Great Offshore

HDFC Securities has a positive view on Great Offshore because of the company’s high growth and low risk business model.

HDFC Securities' Report:

We believe the high earning visibility from marine and port services and huge cash on its book will be utilized for asset acquisition or new orders. We are in the process of initiating coverage on the shipping sector where we will give a target price on the company’s stock. However, we have a positive view on the stock because of the company’s high growth and low risk business model.

Disclaimer: The views and investment tips expressed by investment experts on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Source: MoneyControl

Expect 10% decline in Punj Lloyd: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that one can expect 10% decline in Punj Lloyd.

Bhambwani told CNBC-TV18, "In Punj Lloyd I won’t rule out 10% decline from the current levels down to Rs 225-230 because that is where I expect the market in the absolute short-term to see some amount of short covering on this counter. On the upsides if at all the stock does decide to go up Rs 310 to Rs 320 will be a fairly stiff resistance for the bulls to overcome, now that will be kind of litmus test. Should the bulls manage to keep this counter above Rs 320 levels with higher volumes and increasing commitment from traders, which looks like a far cry from where the market is right now only then the counter actually turn for the better, till then it is likely to remain under pressure. If at all you are holding the stock in your portfolio the question you need to ask yourself is can you actually sit on it for the next two years at least one and a half years. If yes by all means hold, if not I think you should look for alternatives."

Disclosure: Analyst doesn't hold the above stock.

Source: MoneyControl

Exit Punj Lloyd, says Madan

Ashu Madan, National Head of Religare Securities is of the view that one should exit Punj Lloyd at the first available opportunity and wait for a while to look at and have a relook into the entire space put together.

Madan told CNBC-TV18, "Punj Lloyd has an interesting specification in the sense term that fundamentally the order book is with a better margin once that legacy is over. But at the same time, if you look at the specifics at the current earnings, it is 25-30% expensive than the index or the other construction peers in the space. But at the same time if you compare it L&T it is at a discount of 25-30% so it is how you take it but as a cautious call I would go for that camp where it is still expensive 25-30% to the peers. So still there is room to go down, so I will get out at the first available opportunity and wait for a while to look at and have a relook into the entire space put together."

Disclosure: Analyst doesn't hold the above stock.

Source: MoneyControl

Hold ICICI Bank: Bhambwani

Technical Analyst, Vijay Bhambwani is of the view that one should hold ICICI Bank.

Bhambwani told CNBC-TV18, "In ICICI Bank Rs 460 is what we have seen as a recent low on this counter. I do not rule out the possibility of ICICI going down all the way down to Rs 460 again. Possibly if the market does crumble maybe even violate that but then along with ICICI every sector along with the banking space to a varying degree might also feel the pain. Having held on to it for so long and having seen more than 50% erosion in your capital, I do not think booking such a big loss is something that I would advocate."

He further added, "The emotional damage is much more significant compared to the financial damage probably it will drive out the investor out of the equity markets completely. So I think one should hold on to this stock, monitor Rs 620 a level, which is where I think a threshold of crossover, might occur. Should the stock actually start to trade consistently above Rs 620 levels with increased volumes, higher commitment of traders in the F&O space then you could say that the bottom has been made and the stock is headed higher. Till such times one should hold on."

Disclosure: Analyst doesn't hold the above stock.

Source: MoneyControl

BPCL likely to loose value: D Dutta

Devangshu Dutta, Consulting Editor of Outlook is of the view that Bharat Petroleum Corporation, BPCL is likely to loose value.

Dutta told CNBC-TV18, "Metals could drop a little further; one potential short because it defied the market is BPCL, it hasn’t lost any value in the last week or so, so given what has happened to other refiners, sooner or later its likely to loose value."

Source: MoneyControl

Infosys has support at Rs 1250-1275: D Dutta

Devangshu Dutta, Consulting Editor of Outlook is of the view that Infosys Technologies has support at Rs 1250-1275.

Dutta told CNBC-TV18, "The technical problem is that you are now dealing with support resistance levels we last saw in mid-2006. The market has a memory because traders and investors in the market have a memory as in someone who has bought Infosys at Rs 1275 two years ago and made money, may or may not be prepared to buy it again at Rs 1275 and make money and the longer that connection gets in terms of time the more tenuous it is and I would say that right at this moment you have to reboot our entire analysis in terms of supports and resistances. The prices we have been dealing with over the last one and a half to two years are fairly meaningless and I don’t think you can expect Reliance to go back to Rs 2200 not within calendar 2008. So if you are going long at these levels you are going long with hopes of very short term small profits or you are buying with a 1-2 year investment perspective."

He further added, "At these levels I think Infosys at Rs 1250 or Rs 1275 levels will have support coming in and people will do wait for Q2 results and guidance’s. For Reliance, it seems to be a slightly different case because you have to see Reliance and RPL together, even though they are separate companies, the RPL situation is also fairly worrying and that stock has lost about Rs 40 in the last 15 sessions that’s in percentage terms or a bigger loss. So I would maybe be looking at Reliance Falling even significantly lower from these levels and the take on RPL is probably more important than the take on Reliance itself because those two stocks will move together I think."

Source: MoneyControl

D-Street mayhem: Stocks and sectors to watch: Ashwani Gujral

Heavyweights are taking huge beating on the bourses, due to which benchmark indices are trading near September 2006 level. Markets are taking cues from global markets, wherein European markets were crushed very badly. Metal, realty, technology, power, telecom, capital goods, oil and pharma stocks are under huge selling pressure.

Technical Analyst Ashwani Gujral feels investors should not short now as it does not make sense. "One will need to go short only if there is a decent bounce back. In the next few days, 3,800 will probably get tested once and that will give one a shorting opportunity. In this market, short positions are so high that any kind of global rate cuts could well take this market 150 points up, so shorting right now is not a good idea. Overall, unless the markets can stay above 4,000, it's a sell on a rally market."

Gujral feels real estate stocks have got beaten too badly to go down anymore. "During the software bull market, IT stocks got beaten up the most. There is hardly any scope for downside on realty stocks, so shorting them here does not make any sense."

So, which stocks can see the most downside from here? Gujral says: "The big boys are the only ones that still have some juice or some meat left. Stocks like Reliance, Larsen & Toubro, BHEL - those holy cows that no one ever touched -are going to get beaten up. The rest, or 80%, of the market is already bashed up enough, so they probably don't have as much downside now as largecaps have. Today, the index is down more because of largecaps. The midcaps are already done and over."

Source: MoneyControl

Mkts at 2-yr low: Experts make sense of mayhem

Big carnage was seen on the Dalal Street, as it was a capitulation day for the markets; bears took complete control over bulls. Metal and realty stocks got crushed very badly following technology, capital goods, power, telecom, oil & gas and banking stocks. Midcap and small cap stocks also took huge beating on the bourses.

The Nifty and Sensex touched new-2008 low, due to this global meltdown. All indices ended in red. The Sensex tumbled 793.35 points and Nifty fell 236.7 points to hit an intraday as well as new-2008 low of 11,732.97 and 3581.60, respectively. The Sensex closed with a loss of 724.62 points or 5.78% at 11,801.70. The Nifty fell 215.95 points or 5.66%, to settle at 3602.35.

E Mathew, Director, Mathew Easow Fiscal Services, said the decisive move below 3,800 has certainly created tremendous amount of panic. “A lot of fundamental analysts are now following technicals. As one level breaks after the other, a sense of panic is creeping in, which in the long run may be good for the market and could lead to capitulation.”

He sees major support for the Nifty below 3,800 at 3,570-3,600. “It has to be said that important levels one after the other are getting violated. Nevertheless, I do feel the capitulation levels could take us somewhere close 3,570-3,600. In a way if a total sell-off takes place, it could be good for markets, so that the poison is totally cleaned out from the system.”

Mathew believes markets may reach the capitulation stage this week itself, because, Infosys’ results are not going to be too encouraging and there is no silver lining as of now in Europe. “These are typical signs of capitulation levels and hopefully the last bull would have also bailed out. After this, some sort of base building could commence around 3,570-3,600 zone.”

Vikas Sethi, Managing Director, Sethi Finmart said that there is panic everywhere; people are not trying to look at the markets from an investment point of view. “They are just looking at the market on a daily basis and whoever would have put in money in the last three-four days would have suddenly lost it in huge percentage terms. My advice to investors would be that this is a very good time to get into the market and start investing in the market and if people do invest in the market at the current level, I feel they would be committing the same mistake, which they have done by not selling the stocks at 21,000 levels.”

Ambareesh Baliga of Karvy Stock Broking does not expect any sort of bounceback from the current levels in the near future and believes that the liquidity crunch is driving the markets down. He expects this scenario to continue for some more time. “It does not matter whether it is 3,650 on the Nifty or 12,000 levels on the Sensex today because most people have given up."

“Clearly stop losses are being triggered. There are margin calls happening but unlike in the past where people used to come and start buying whenever the markets used to fall hoping for a bounce back; the market scenario is such that even people who used to come and start buying in a bounce back have disappeared,” Baliga added.

Baliga does not expect anybody to come forward and start buying as the market is close to panic and many people have given up on the markets. He does not believe that payment issues would be a problem in the Indian market. “I do not see any sort of payment issues cropping up unless brokers are making high amounts of margin funding, which I do not think is happening. I do not expect any sort of issues from Indian markets.” Baliga said that the market did not expect Reliance to quote below Rs 1800 and is sure there would have been some margin calls at Rs 1,700 levels.

Devangshu Dutta, Consulting Editor, Outlook, feels that in today’s terms the market seems to be holding at 3615-3620 levels. He sees lower prices this week, maybe 3500 before there is a significant turnaround. “And today’s fall was so sharp that it probably triggered a lot of margin calls and obviously what happens in the US overnight is likely to be fairly important.”

Mehraboon Irani, Vice President, PMS, Centrum Broking said what we saw in the second half of Friday and what we are seeing today is just like a tidal wave sweeping across and we are just waiting over there trying for survival. “Over the next couple of days, we could reach a climax at least for the time being and possibly a rally could surface from there or maybe there could be a further capitulation of the stocks prices around the time results of the company start coming in, which could probably provide the base for the next rally to come in.”

“There is absolutely no demand, we are in for a cyclical slowdown, and results are not going to be interesting. People are saying things are attractive, I also say things are attractive but attractive from the value angle but from the growth angle I don’t think there are many corporates where anybody can confidently state that they are going to grow consistently in terms of numbers as far as topline and bottomline goes over the next three-four quarters because this is a slowdown, which is also going to take its toll, Irani added.

Shashank Khade, Vice President, Portfolio Management Services, Kotak Securities believes that the fall is because of the developed markets and unless you see some sort of stability coming in the developed markets, I do not think you can really see an end to this sort of a sentiment.

Source: MoneyControl

CRR cut by 50 bps; move to infuse Rs 20Kcr into system

The Reserve Bank of India, or RBI, has cut the cash reserve ratio, or CRR, by 50 bps to 8.5% with effect October 11. The cut will infuse Rs 20,000 crore into the system.

CRR is the portion of funds that banks have to park with the central bank.

Source: MoneyControl

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