Another 3 Consecutive Days Of Fall:Fed Rate Cut Announced,Will Markets Firm Up Finally?

31 Jan

Posted by Shyam as IntraDay Calls, Results, Market News

So the investors have seen another 3 consecutive days of fall in the markets including yesterday when sensex tanked 333 points to rest at 17758 points and nifty lost about 113 points to settle at 5167 levels.Actually there were some concerns in the investors minds like the RBIs decision of not lowering key interest rates then weak global cues and finally the Fed rate cut.

But now they have reasons to cheer up as the Federal Bank has once again decided to lower its interest rates by half a percentage points to 3% now withing days of announcing its last rate cut on Jan 23rd by 75 basis points.But the fact of the matter is that the US economy is actually on a brim of recession and thats pretty clear from the last 2 Fed rate cuts totaling 1.25% in a gap of 8 days or so.The Dow and Nifty regained the lost positions partially but still closed lower yesterday.

The Asian markets are showing some good recovery in the morning trade with Fed rate cut trigger.By this time the Nikkei 225 is already up by 72 points and Hang Seng is trading lower by 1.41% points.So we might see a upward move today along with some good results announced from Industry heavy weights like Bharti and DLF with 1,722 and 2,145 crores respectively.

I’ll be bringing some more articles here on the Fed rate cut,RBI policy and the recent IPO news in coming days.Meanwhile the Future group IPO will be listing tomorrow ie Feb 1st and another good IPO is on the way from Emmar MGF.The Reliance Power IPO has also taken a hit from the investors with grey markets expecting a premium of just 150 rather than Rs450 which was expected out of this some time back before the fall.

Lets have a look at few scripts for coming days

Jindal world cmp 400

GVK power cmp 741

Raymond cmp 358

SEL manufact cmp 215

Eassar shipping cmp 223

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2 Responses

Indian Equity Investment Guide

February 3rd, 2008 at 12:32 pm
1

Hello,

Tha markets are still struggling to stabilize. It looks like it is fairly stable at levels of 17000 but we are still seeing ups and downs of 800+ points and that is what I am worried about. The Indian Economy will only be temporarily affected due to global reasons like FED rate cuts and US stagflation scenario, because Indian Economy is less dependant on its exports.

Regards,
Indian Equity Investment Guide
Shyam

February 3rd, 2008 at 8:02 pm
2

Yes you are right unlike China and a few other Asian countries Indian Economy is less dependant on its export to US as that constitutes just a fraction of the total export business that India has.But we cannot decouple the Indian markets from the rest of the world as many have been saying when the markets went up.This temporary jitters will be there for sure due to sliding US economy but the long term prospect of Indian markets is bright.I feel the markets will see a uptrend with build up to the budget.So lets hope for the best.