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Tough Macros are now reflecting in the Micros… Signs are Ominous for the Sensex at 17500 and Nifty at 5300 Levels…..

Tough Macros are now reflecting in Micros…Signs are Ominous for the Sensex at 17500 and Nifty at 5300 levels…Kindly exercise caution and utmost discretion when taking risks,especially on the long side….stop loss may be triggered….don’t be swayed by the record FII Inflows in the first three Months of Calendar year 2012…Going Short has been indicated for awhile now especially at 18500 levels a few weeks ago…Going Short Now at 17500 Sensex,therefore increases the relative risk as Liquidity Flows props up the Sensex….A Safe and Sensible strategy remains  to wait and watch and stay on the sidelines…go watch the Movies !…take that short break to the hill station or beach and prepare to enjoy the Summer Vacation…the next Four Days give you a long Weekend Break…this year too may not be any different for May…when you Sell and Go Away !

  • Global Cues….USA Fed warns yesterday that there may not be a third round of quantitative easing and therefore further Bond buying may be halted…Europe slides further into recession….China Economy decelerates sounding caution…Will it or Won’t it ~ Israel initiate all out Conflict with Iran ! ?…without awaiting USA go ahead !…Watch out for further rise in Oil then !
  • Domestic Cues…Financial reforms put on Hold as UPA does not have the Lok Sabha numbers and therefore political will to introduce these…more so as new coalition support partnerslike the Samajwadi party which swept the UP Elections last month weild increasing influence…FCCB Maturities this year may witness defaults…Suzlon,a case in point…it’s CFO just resigned…Crisil just announced that 3.4% of the Companies it covers have defaulted last year on debt repayment in FY 12…that’s  188 Companies defaulting…the highest in ten years….Banks Gross NPAs soared to 2.9% of Advances…Weak Economy and Tight Credit have been the reasons…FIIs and FDI Investments are on hold as there is confusion and lack of clarity on GAAR and the retrospective effect going back 42 years ! been announced for Tax Avoidance and Structuring Deals and issues…Vodaphone deliberating to move the United Nations on this….TCS & L & T Infotech facing huge Class Action Suits from ex employees in USA….Petrol Price Rise indicated clearly in the immediate future as Oil Companies crying Foul,Lower Oil Subsidy provided in Union Budget of FY 13  despite increasing Crude Oil Prices…Increasing fear of Government being Anti Business and keen to protect it’s PSU Fiefdoms…Changing Pricing Basis in Coal India not received well and strongly sparking off  Minority Shareholder Activism….Over 6000 Sub Brokers have not renewed their SEBI Registration….Many Members of Stock, Currency and Commodity Exchanges, who had expanded vigorously all over India and even Overseas are significantly closing or curtaling Operations to contain Costs….Equity Mutual Funds Schemes seeing lowest in Nine years Inflows and high Redemptions and therefore decreasing Assets Under Management…many Mutual Funds looking for Outright Buyers….Rupee Weakening…Interest rates refusing to ebb…Inflation ebbing may just quickly reverse trend as Oil Prices threaten to rise further…SEBI announces that Stock Exchanges can List but not on their Own Exchange and with several complex riders…Of the Nearly 1400 Private Equity Deals in the five period till 2007,not even 400 have managed an exit….the rest are stuck ,awaiting more bullish and suitable valuation times… in Hope  

Don’t go crooning  at the Indices,the  Desi Boys Hit  “You’re My Hero !”

Last but not the least….38 year old BSE Chief,Madhu Kannan has just announced he is moving to the Tata Group shortly….Not sure if this is an Ominous sign though  for the Markets ! …but what is,is a seasoned veteran trader and speculator wanting to work for me,after realising that Wealth Creation and Long term Relations and Goodwill with Clients are build over Years and not just in Bullish Times….If you sustain and hold hands of Clients through difficult times with sound and sensible portfolio advice without focusing on the Fees that they pay you, these Clients will sustain you too…and believe me,with the volatility and swings the markets have thundered on us over the past few years,it’s easy to lose a Client than gain one !…and also a SEBI Top Guy telling me candidly how frustrated and helpless and disillusioned he is when it comes to interacting with Capital Market Intermediaries in India,some even leading..of  falling Ethical Standards…of putting Self before the Investor !…Ominous….

…and what’s not helping is also the fact that in the period 1992 to 2012, Five year Bank FDs renewed in the 20 years have given a higher rate of compounded return than the Sensex !….destroying the ‘Buy and Hold’ Philosophy   

Mid Term Polls look more Likely than Multibaggers this Year !…though I continue to Re-Search for them…the hyphen is deliberate !

Cheers !



5 thoughts on “Tough Macros are now reflecting in the Micros… Signs are Ominous for the Sensex at 17500 and Nifty at 5300 Levels…..”

  1. Hi Gaurav,
    But if market slides Fed will again go for QE. I mean as many pundits pointed out there are elections in 2012 and politicians can’t afford falling market:)

    For India, Swamy has predicted midterm poll by September 2012 🙂 AND further QE from US/Europe might keet high global inflation which might reduce rate cut frquency by RBI making business env tough.

  2. Hi Gaurav,
    with so many India specific worries in your post indices should fall to fill May 2009 post-election gap 🙂


  3. Hi Sameer and Harish…interesting comments…just sounding caution…Harish,I am happy when markets fall as I sense Opportunity…you’re on my wavelength…the tough call is to call the inflection points when the Cheaper will not get any Cheaper and the Expensive will become Cheaper !…it’s a trade off between Value vs Price and the Markets have intermittently demonstrated Irrational Exuberance and Anxiety,testing our conviction and temperament while providing super opportunities…Cheers !

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