Market Matrix – The market paradox like last year

By krsna Khandelwal – A veteran market analyst

Friends,

I proved wrong in saying that Nifty would recover in light of a few favourable developments but strange are the moves who have been operating under-cover. For if it is FIIs withdrawal at work last week, it is hardly understandable in view of stronger dollar which let them have take away only value back home in dollar terms. The withdrawal would have been meaningful a month or two back when dollar was cheaper and when the Indian outlook was bleaker. Today we have lower interest rates and stable govt. It is no more threatening industry to check prices, the nuke-deal drama is over, USA has taken strong action against Pak embedded terrorists and has conveyed to govt. to act more sensibly, the IIP number has given back dwindling confidence, the inflation seemingly has no future threat , the oil is no more boiling, the busy season has arrived and the new RBI governor Mr Subba Rao is not supposed to be hawkish and Manmohan has greater respect and power to keep reforms process on. The moody ministers have been noticed to keep calm and not blabber at will in incoherent terms. The left is almost left out of the political race. It may never have an opportunity to support govt. of whatever hue. On the negative side is the real-estate prices going down , the organised retail seeing tough times now and ahead, the world’s commodity markets having developed cold feet (in a way it would help India). The balance-sheet is favourably balanced. Should I still speak in desperate tone and dejected mood, I think not. They say fortunes are made in bearish times and realised in bullish times .

Now see yet another dimension of prevailing paradox. The week saw Nifty lose 123 points along with 580 points loss for Heng Seng ( the right company to travel together), Nikkei maintained level while DOW added 201 points and FTSE 176 points (the ones with lesser spark in future of economy have shown positive move).

My attempt to convey is the sole matter of designs being at work rather the endorsement of reality in the same way that was happening in late last year and early this year when all asset classes were going up simultaneously and had sowed the seed of bad times to come . The reverse is the case now and those who weather the storms will be seeing bright sun-light.

I am ready to listen to counter argument, please favour me by sending them.

Hari Om

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