Wednesday, September 15, 2010

19000 crossed...Whats next for Markets

All of Sudden Markets across the global went from Bear market to Bull market with a short span of 1 week started with ISM Index on September 1 in US , Economic Data coming from China and very good  IIP Data of  industrial growth at 13.8 per cent in July in India led to markets moving by over 5% to 7% within a short span.

Though they are some concernes with Data coming especially Dr.Doom commenting that ISM Data is flawed
and our own Provisional Data of IIP might not be very reliable   as commented by analysts.

So what exactly moved our markets in very short reason is good IIP Data and domestic Demand coupled with Strong FII inflows Made our markets reaching 33 months High and now the same analysts are saying 20000 and 21000 for sensex is no BigDeal

And also there is talk of some Hedge funds pouring money into market when our own Domestic institutional investors are pulling out the money . To get a better understanding check the below chart
 Can see that DII were selling huges amount in last 3 days

Check this to get a look of FII flows ,whole of August and September except on last expiry day FII seems to be buying into equities

FII Net position (Total Buy -Total Sell) is very huge meaning FII are Buying more than Selling and thats what precisely is adding Fuel to the markets for now..

Looks like they might keep on doing that for some more time..untial the valuations of index becomes High and I guess we have RBI midterm policy review and Analysts are expecting a a hike of 25 to 50 bps in Repo Ratio. and do something to control inflation without effecting the growth.

I guess the current market run is due to FII and Liquidity driven rise and expect RBI to suck some amount of Liquid from market before inflation becomes too hot to handle. Lets see Tomorrow ..cya for now

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