Thursday, May 21, 2009
S^ocks and Politics
After the big rally on Monday,we saw a lot of volatility in the Indian markets on tuesday.Basically on Monday the markets were driven by large caps.Mid caps and Small caps still had a long way to go.Analysts expected a lot from stocks like GMR as the market was driven more by sentiment than by reform.
On Wednesday we saw a surge in Mid cap stock prices as they were unwilling to stay behind in the big rally.Stocks in the infrastructure sector shot up the most.Cement was one sector which had a "gala" time.Tata Motors was one stock which became dearer by about 10%.But on the other hand stocks like RIL and Bharti were quite disappointing.The trend was due to the already high prices of the large cap stocks due to the rally on Monday.
Stocks like GMR jumped higher and higher and are on the same track today.Right now the stock is trading at about 170 odd levels which is more than three times it's price two months back when the bears had ruined the market.Suzlon Energy ,though a large cap is still looking bullish and is trading at about Rs 95.The same stock was trading at Rs 35 a couple of months ago.
Though Satyam was stubborn like a bull(see the irony) on Monday and did not participate in the rally with it's other pals,today it is soaring and is trading almost at about 49 odd levels.
The banking sector has also done quite well in the past couple of days.One of my favorites is Bank Of Maharashtra which was trading at about 33 odd levels yesterday.This stock had announced real high dividend yields of 15%.On Friday,three days before the "MAGICAL Monday" the same stock was trading at 25 odd levels.
I am expecting a lot from Realty sector as I think the worst is over for it.Though Unitech seemed bullish yesterday,its counterpart DLF was down almost 10%.Unitech after it's Gurgaon Hotel sale seems more and more bullish.
Due to the volatility factor high ,retail investors are quite apprehensive about the course which will be taken by the market. .Though the analysts have predicted SENSEX to oscillate between 12000-16000 in the days to come,people are still refraining from entering the markets out of shear trepidation.I myself ,feel that at some point of time my favorite stocks can also see unexpected correction in their prices.What the retail investor must look out for is a stock which he/she can shell out money and is definitely going to yield good results in a few months time.I do not suggest buying much of those stocks which are already overvalued though they might look very promising.
Ispat industries was another of my favorites which still has scope for improvement.
Coming to currencies,the Rupee is getting stronger(dollar weaker of course) which might prove disappointing for the textile industries as most of their income comes from exports.With the crude price also soaring I feel that the world markets may sooner or a bit later come out of the dark tunnel.NYMEX crude price is about 62$ per barrel.
Inflation is at .61%,lower than last week's .7%.Food prices are still high and a lot is expected from UPA government to counter them.As I have started the topic let me tell you that Mr Pranab Mukherjee is a definite choice for Finance Minister after the party did not approve Mr Montek Singh Ahluwallia for the post as we require a hardcore politician more than a technocrat.P Chidambaram will stick to his Home Minister's "kursi".Kapil Sibbal is likely to get promoted to External Affairs Ministry.This time there is not much hope for allies for the simple reason that the Congress government did not require them much.Jai Ram Ramesh and A.K Antony will continue to hold their ministries of Power and Defence respectively.Let us see what reforms our new government introduces after finally getting rid of the Left's support.
Posted by rishabh at 12:47 AM
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