Monday, September 6, 2010

Buying rush to continue in small and midcaps

Dalal Street is all set to open higher on positive global markets and better than expected jobs data in the US. Asian markets opened the day in green and are expected to close the day flat

Global markets are expected to trade the first half of the week in a range bound fashion. US Markets are closed for labour day week end on Monday. Global equity investors are on sticky turf whether to hang on with their investments or withdraw the same.

Indian Economy - Tough times ahead

Indian economy after witnessing best of the times courtesy government stimulus, increased consumer spending, is ready to hit a road block soon in the form of another rate hike, global market correction.

Weak economic data indicators are pointing to a slide in the US economy. DStreet US market analyst Satish Bhogadi adds "We do not expect a double dip but there will be a considerable correction in the US equity markets. There will be no betterment in the current situation for the next 4 months"

Indian equity markets have done reasonably well outperforming rest of the crowd in the last 6 months. But dissecting the FII data reveals that the inflows have started slowing and might see some outflows in the coming day too. Having said that there is no second thought about the state of Indian markets from a medium and longer term perspective.

We expect this to continue for a shorter phase (1-3 months) and this kind of short corrections will augur well for the long term health of the market.

We see another range bound session with minor volatilitly with small fish jumping in the pond