Sensex sinks below 24000 & I love it !
Had sounded the alert way back in December 2014 that 2015 would be a volatile & vulnerable year & had reiterated this often in 2015….had opined that FPI Inflows will drop and even reverse after record Inflows in 2014 that gave the Sensex & Nifty the swagger to move ahead in 2014 and early 2015
Global & Domestic Pulls & Pressures were unleashing on multiple fronts across China,Middle East,Russia,Brazil,South Africa in particular
Falling Oil & Slipping Currencies continue to play havoc with Economies of Countries that depend on Oil Revenues
I’m reproducing an interesting and relevant blogpost of mine just over four months ago in September 2015
A few Extracts from the above blogpost ……
“I’m Hoping for A Merciless Market ! ….that’s when you can get into serious wealth creation opportunities at lower risk for higher gain !
Too frequent communications then would have served little purpose other than the danger of generating ‘Noise’ from the exchanges !
While we are not into Equity Fundamental Advisory for Bragging Rights we must raise this issue to revalidate our cautious view held in 2015
We have held a view of Sensex Range of 25000 to 27000 for most part of this year 2015,especially after it touched 30000 on March 4,2015 after closing 2014 at 27500 levels.
We had opined in December 2014 itself and in January 2015 that the Sensex will record an all time high of 30000 early in 2015 as the three legs of the Equity Table ~Momentum,Sentiment and Liquidity ~ were all in favour although the fourth leg Valuation was beginning to raise an alert on the Corporate Earnings Front
Early in 2015 we were unable to assess with the required degree of conviction on four domestic factors and three overseas factors that would play out in 2015.Of course everyone had a strong view or opinion on these !…these were :
- Significant Rate Cuts demanded by the Corporate Sector to revive Manufacturing Sector ~ Yet awaited
- Corporate Earnings in FY 16 after a bad Q 4 FY 15 ~ Q1 & Q 2 FY 16 seem to carry forward from Q 4 FY 15 ~ Sensex FY 16 EPS projections lowering inevitable
- Normal Monsoon ~ After a promising June,it’s been downhill in July and August 2015 and Monsoon Shortfall is now a given
- Pace of Economic Reforms especially on the GST ,Land and Make in India Initiatives ~ Not much Headway given the Political Opposition that has disrupted and washed out whole Parliament Sessions
- Was the record surge of Chinese Stocks backed by fundamentals
- Will Greece be bailed out or allowed to default and exit the Eurozone
- When will the US Fed raise rate
What we did assess with conviction was that FPI Inflows will ebb or even reverse in 2015 from the record inflows in 2014…another reason that should mute markets…as this was played out it was ignored by a frenzied midcap space market that justified it being balanced out by increased retail participation and absorption by increased Mutual Funds Investments
On ET Now Prime time on March 31,2015 I had aired my fundamental views for the new FY 16 that was dawning to a wider audience than just clients.I had stated that the markets were running ahead of fundamentals