The Indian Stock Market Scenario

In keeping with global trends and the ever-rising oil prices, the Indian Stock Market is facing a downtrend in both the near-term trend and the long-term horizon. The Market which touched the dizzy heights of 23000 (BSE Sensex) is now trading at around the 14000 levels, a frenzied drop of around 40% approximately. The reasons are as clear as daylight. The Indian Stock Market has been scaling new levels without any real fundamental reasons. Feel-Good-Factors like Low inflation figures, Good industrial production figures and positive economic indicators probably buoyed up the Index. But it was too good to last. The crunch came when the FIIs started offloading their investment and the new IPOs started failing to collect the expected subscriptions. With inflation climbing steadily during the month of May 08, the large investors started selling their holdings and booking profits. This left the Indian Stock Market on the lurch. The stock market pundits say that the Dalal Street has fallen into the bear grip. Stay away from shares, they hasten to advise you.

But really , any investor with average financial intelligence can see that if the investments are made on the basis of strong fundamentals and not on hearsay, then such investment can still bring in profits. This is the time for the long term investor to step in and start investing. Investing in stages is the best strategy. Each dip in the market can be used to buy or invest in really blue chip stocks., companies that perform strongly, consistently and that have fat order books. Such investments will have to be made with a real long investment horizon.

Speculation,short-selling and trying to make that quick buck can really land the unwary investor in to trouble. Leave the day trading to the slick operators on the bourses. Invest in selected stocks and forget.

The markets will come back. The market will definitely find some good news to ride back into glory. The intelligent investor can afford to wait. The investor in a hurry and haste may stand to lose his bet.

The Indian Stock market is choppy but the bull story is not over yet.

PKP Iyer

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