Downward momentum may continue
Jayanta Mallick
Institutional investors reducing portfolio.
The third quarter results have been testing convictions of the optimists.
However, dampened sentiment has forced a large chunk of non-institutional
investors to sell at a loss. Among the institutional investors, certain FIIs
are also booking losses in their exercise to reduce portfolio.
This week the Sensex is likely to test its bear market low. A moderate bounce
back would largely depend on good news, whether domestic or foreign. If RBI
takes a softer view on the interest rates, as expected by many in the market,
the sentiment may temporarily change for the better.
Bad news: Not yet over
On the global front, bad news is not over. Things have turned trickier as the
UK slid deep into recession after Germany, Europe's biggest economy. The Obama
euphoria may not drown out Wall Street concerns over the economy and sharp fall
in profits. But one should not rule out the possibility of popping up of
dramatically positive news when a new regime is taking over.
While investment advisers remain bullish on the long-term prospects of Indian
equities, their exercise in revising earning estimates is getting more
conservative.
Market strategists' focus, on the other hand, currently seems to be on stocks
and not the indices or sectors.
There are indications that past practices are being reviewed and fresh approach
towards stability in performance in troubled times is gaining prominence. The
discounted market valuations are increasingly not being regarded as a trigger
for buying.
According to market intelligence, many prefer to keep cash and wait till the
fourth quarter results and the elections.
Some market players, who have large retail client base, suggest that small
investors with resources not more than Rs 50,000 are steady and selective
buyers in this difficult market. They appeared to be ready to wait for two to
three years to earn a decent return.
Fresh selling
This is interesting in the backdrop of a fresh wave of selling by the FIIs and
domestic institutions reducing their activity.
Among the overseas investors, pension funds and high net worth individual or
family investors were rather circumspect last week but mutual funds and hedge
funds, particularly of European origin, have suddenly begun pulling out money.
According to officials with overseas institutions, portfolio investments from
abroad may turn negative or remain neutral in the first half of 2009 against
estimates of a positive inflow.
(Responses may be sent to [email protected])
http://www.thehindubusinessline.com/2009/01/26/stories/2009012651250400.htm
ekamber
--~--~---------~--~----~------------~-------~--~----~
You received this message because you are subscribed to the Google Groups
"Kences1" group.
To post to this group, send email to [email protected]
To unsubscribe from this group, send email to
[email protected]
For more options, visit this group at
http://groups.google.com/group/kences1?hl=en
-~----------~----~----~----~------~----~------~--~---
