Market for the Week ended August 15, 2008

ensex did not give us much reason for joy this week. The Sensexe nded 3 % lower 9 that is 444 points) this week thanks to the weak industrial production, morose global markets and the forecast of 7.7 % YoY GDP Growth being lowered by PM’s Economic Advisory Council vs an earlier projection of 8.5% in Jan 2008. The IIP data showed 5.4% rise in June ’08 very unlikely against 8.9% a year ago and an upwardly revised 4.1% growth in May 2008. The biggest sufferer was BANkex. LargeSectors dod lose out a lot. But Bankex lost the most. Bankex dipped for about 7 % Second in tow was Realty Sector. Then Metals and Capital Sector. The market sentiments were quite low. Obvioulsy who would rejoice with the market dipping about 444 points in one week .Moreover lowering the IIP data did not do much to brighten their spirits.High inflation also increased their worries.Government accepting the recommendations of the sixth Pay commission further added to the existing woes.The Sixth Pay commission suggested 21% increase of the Central Government employees.This average 21% increase would amount to some 339 billion rupees. This may further increase inflation, leading to fiscal deficit and resulting to higher interest rates. Even the Economic Advisory Council of the Prime Minister did not help much. They depicted a rather grim and morose picture of the future trends. They recommended tightening the monetary policies which would help to curb inflation a bit but would also weaken the Economies growth rate . That’s a very bad sign. For so many years we have been saying that the Economies Growth Story remains intact. However that’s not what it seems now. That is bad news for all Equity players.All those who are investing like mad to make easy profit once the market stabilizes might feel a bit shaky and apprehensive with this suggestion. We all know that one of the primary reasons for this market scenario is Crude Oil Pricing. The rise in Crude Oil price led triggering off a number of elements resulting in Inflation . There is some respite in this regard. The Crude Oil prices fell a bit. This decline in Crude Oil prices strengthened the Us dollar. The Global markets are of the view that Commodities demand might fall in Developing countries post 2009. The market seems to be range bound and would continue to be the same in the next few weeks.Try and pick up Banking Stocks to make easy and quick profit once the market resurrects itself. Many people are going for Large Stocks as these companies growth story remains intact.