Thought for the day
"They who dream by
day are cognizant of many things which escape those who dream only by night."
Edgar Allan Poe (American, 1809-1949)
Word for the day
Twilight (n)
A terminal period,
especially after full development, success, etc.:
(Source: Dictionary.com)
Malice towards none
"My name is Rajan - Chotta Rajan!"
First random thought this morning
PM Modi once famously told the Congress Leadership, on the floor
of the Parliament, that his political acumen (सूझ बूझ) is beyond any doubt. The
recent socio-political events may however force him to rethink accuracy of that
claim.
After belittling and rendering the award returnees irrelevant,
restoring the order in FTII, punishing the illegal beef trader and getting
justice for Kalburgi and Mohd. Ikhlaq - a retrospection would guide him that
the things could have been handled in a different and perhaps better way.
The Bihar election is finally over. And I must congratulate the
InvesTrekk team for once gain reading the people's mind most accurately.
I feel the market will be disappointed and may shed a couple of
percentage points early this morning. But that would be all for the sake of
Bihar elections. Nothing more.
I am more worried about the jitteriness that is growing in the
Western Hemisphere. The recent US data has put the December "Lift
off" back on table. The global financial markets appear eager to make
necessary adjustment before the Yellen and her colleagues meet middle of next
month.
The bond market was first to react with US benchmark 10yr yields
rising 9% and German yields rising over 32% last week.
Commodities markets were equally jittery. The Reuters all
commodities CRB Index fell to 16yr low, led by precious and industrial metals.
USD strengthened with DXY Index closing into 100 mark, the highest
level since April 2015. Offshore Yuan touched the lowest level since the August
devaluation. EUR also fell close to its April lows.
Indian benchmark yields and INR have also gave away much of their
respective gains since September Fed meeting.
Moreover, the 2QFY16 result season is almost over with most
surprises on the downside. It is likely that we may see serious earning
downgrades before 3QFY16 results. Bihar results will certainly not help the
sentiments.
I believe that after adjusting for the Bihar election results
early this week (some selling and some short covering at lower levels), Indian
equity may remain under pressure from FPI selling pressure as USD carry trade
continue to unwind and domestic investors refuse to support the market unlike
September.
As I said, I am not worried about the 10% fall in Nifty that we may witness
before March 2016. My worry is that the market may enter a protracted phase of
uncertainty and inactivity making 2016 a difficult year for market participants
and investors.
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