US Markets continued to slide, with S&P closing at a 7 month low. Another 1 pct loss in S&P might trigger a massive sell off technically. Asian markets plunged yesterday following US Markets on friday.
Dalal Street closed better than most of the global markets yesterday and rightly so. One major concern about Indian markets is they are extremely vulnerable to FII selling and one massive unwinding by one fund might create panic in the Indices. For now we do not see any such indications.
Realty and Metals continued to sell of and it is a good idea to stay away from these two sectors. Cabinet board failed to take decision on crude price hike. Inflation will be a major concern if the government says OK to the hike as crude oil forms a major part of our Inflation index.
Reliance Communications continued to swing upwards on the stake sale news. While US based telecom giant AT&T denied reports of the company picking stake in Reliance Communications, it is not going to be that easy to get a buyer for a better price. Telecom will underperform the Indices for the next 2 years. 3G is another pain for telcos which will hit the bottomlines.
Euro continues to slide and this is definitely a cause of concern for US companies that depend on export. Indian Rupee is on a downtrend too, tracking domestic equities and rightly so. We expect USD to hit a longer term top between Rs 48-49