Investors should learn to encash market momentum
How sensitive are you? If you don’t know the norms of taking the roller-coaster ride – here’s a primer for you to know it better, as the bourses this time took just six trading days to scale up from the 16K to 17K level (purely a demand driven by liquidity – according to R. Swaminathan, National Head of Mutual Funds, IDBI Capital) – while the journey from 14K to 15K took as much as 143 days.
Certainly the market is all set for more such shocks and thus it’s time for the investors to beware! Now it’s about to reach the 18K mark! But is this recent skittishness in the Sensex only due to the Fed rate cut and leadership shown by Reliance (both Mukesh & Anil camps)? Quite a few agree to the latter but there are exceptions too! “The Fed rate cut was the triggering factor. Leadership by Mukesh & Anil cannot be acknowledged suddenly,” Anil Mascarenhas, Editor, India Infoline told 4Ps B&M. Among the promising counters – the Reliance brothers’ companies appear to be a buyers’ delight. A lot of euphoria on scoring on market cap, getting closer to the richest man in India et al adds to the unnecessary explanations of the market rise. Sachchidanand Shukla, Chief Economist, Enam Securities Pvt. Ltd. puts forth his views to 4Ps B&M as, “The current rally largely owes to the Fed rate cut which translates into increased funds flow into the Indian economy. And yes, this rally has been narrower, in the sense they have been driven by a handful of stocks.” We can easily guess whom he pointed as these ‘handful of stocks’? “Reliance Industries, exhibited a major share of the Sensex movement, has contributed more than 2,000 points in the last 7,000 points rise, really a flavour of the investors in the market,” clearly states Swaminathan.
How sensitive are you? If you don’t know the norms of taking the roller-coaster ride – here’s a primer for you to know it better, as the bourses this time took just six trading days to scale up from the 16K to 17K level (purely a demand driven by liquidity – according to R. Swaminathan, National Head of Mutual Funds, IDBI Capital) – while the journey from 14K to 15K took as much as 143 days.
Certainly the market is all set for more such shocks and thus it’s time for the investors to beware! Now it’s about to reach the 18K mark! But is this recent skittishness in the Sensex only due to the Fed rate cut and leadership shown by Reliance (both Mukesh & Anil camps)? Quite a few agree to the latter but there are exceptions too! “The Fed rate cut was the triggering factor. Leadership by Mukesh & Anil cannot be acknowledged suddenly,” Anil Mascarenhas, Editor, India Infoline told 4Ps B&M. Among the promising counters – the Reliance brothers’ companies appear to be a buyers’ delight. A lot of euphoria on scoring on market cap, getting closer to the richest man in India et al adds to the unnecessary explanations of the market rise. Sachchidanand Shukla, Chief Economist, Enam Securities Pvt. Ltd. puts forth his views to 4Ps B&M as, “The current rally largely owes to the Fed rate cut which translates into increased funds flow into the Indian economy. And yes, this rally has been narrower, in the sense they have been driven by a handful of stocks.” We can easily guess whom he pointed as these ‘handful of stocks’? “Reliance Industries, exhibited a major share of the Sensex movement, has contributed more than 2,000 points in the last 7,000 points rise, really a flavour of the investors in the market,” clearly states Swaminathan.
Source : IIPM Editorial, 2008
An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
