It took just a week to rub off the New Year sheen
Sensex grumbled and tumbled 493 points today to close at 19692…lost nearly 900 points this week….Nifty too rumbled and tumbled 144 points to close at 5905 as we closed the first week in the new year 2011
What did you expect !
Just look at some of the worrying Macros….and they are yet not fully reflected on the Indian Bourses
- Winter Sesssion of Parliament hijacked as BJP refuses to relent on their demand for a JPC to probe the 2G Telecom Scam and the ruling UPA Government equally adamant on not agreeing to this
- Tight Liquidity Conditions
- USA showing signs of revival…will slow down FII Inflows as monies will flow towards Wall Street
- Europe Debt & Deficit Crisis in several nations raising it’s ugly head again and again
- Interest rates firming up fast…IDBI Bank is even offering over 10% pa to Senior Citizens
- Onions,rather the lack of them, and Inflation made you cry…For the fifth straight week Food Inflation jumped and was a record disturbing level of 18.32% for the year ending December 25,2010 !
- Commodity Prices…Oil…Metals…Agri produce…are scaling newer recent highs as global imbalances play out
- The Rupee has hit a three week low today of Rs 45.37 against the US Dollar in anticipation that the continuing US Revival will be confirmed by better latest economic indicators
- Scams after Scams after Scams….. Revelations are affecting Sentiment…Wealth Management and PMS Schemes are on the intense review radar after the Citibank Fraud of over Rs 300 crs exposed last week
- Hawkeyes and Hawkaction of Regulators and Enforcers on Market and Corporate and Banking Hoodlums…market operators are less blatant and are unwinding huge positions …retail and high networth investors are getting a raw deal as lack of Integrity of Operations and Advice affects them and they find themseelves on the wrong end of the Road
- Mutual Funds have been struggling with most of their Equity Schemes..redemption pressures remain high and new schemes are unable to attract a big corpus…Abolishing Front Load of 4% and poor relative performance of many fund houses have been the twin reasons
- Hint of Babu Raj returning as Government delays,denies or disturbs approvals for Private Sector Project Plans
…and you hoped Micros will behave well under such Macro pressures !
Sensex returned 17% returns in 2010…a shade below it’s CAGR since inception 33 years ago…in 2011 looks like the Sensex may merely repeat this…the base is high at 20k….It’s like the ‘Pause’ Button has been pressed…with at times Markets under ‘Slow Rewind’ or ‘Slower Fast Forward’…..Consolidation is beckoning in many sectors…telecom,cement,banking to name a few…..so clearly not very exciting unless you are looking much beyond 2011 like ofcourse you should…..India Story remains intact with high GDP Growth Rates being forecast and the two drivers of Domestic Consumption and Investment in Infrastructure picking up pace in the years ahead..regardless of whether Congress or BJP is in the Drivers Seat