Dear All,
I feel there is more downside leftin Sensex and these upside are kind of relief rallies.
Outlook for sensex looks bearish.
The Reason's for my outlook is that though Sensex is rising on odd days Small cap's are getting hammered . I havent seen postive closing of small cap index.
Most of the small caps have corected are trading at very low .
Going to Large cap following sectors have shown very little growth last year and can be deemed as defensice sector but not leader.
These are IT , Pharma and FMCG
My views are that real estate sector will be under performer this year.
Financial sector has been badly hit after the budget.
Banks are under lot of pressure and there is wide spread belief that banks can be exposed to hedging and in direct exposture to Sub Prime Crisis.
Second Reason is that one of the reasons for FII money in India was from Japanese . Now when FII borrowed money dollar to yen conversion was 125 , currently it is 95. A loss of close to 30 % in terms of forex. Also unconfirmed news are there that Japanese Banks are also involved indirectly with sub prime crisis and they are trying hard to conceal it.
Third reason is that US is trying hard to control recession . 100 basis point fed cut (25 earlier and 75 later ) is a knee jerk reaction to prevent US market collapsing in front of entrire world . US is trying hard to fight recession but despite fed cut every 3 months is not able to keep itself afloat. Dollar is weekening against all currencies.
My greatest worry is that Indian election is pending next year and normally FII will not like to put money since there is no uncertainity how policies can change next year.
Just Imagine what if left government comes to majority , it will really dent the investor confidency.
I feel that sensex will correct to 12800 to 13400 . There can be relief rallies till 16000 to 16500 but it will again correct to 15000.
Hence I advise investor's to remain catious and invest in quality stocks based on research and not just based on advices.
Best option is to invest in Large cap like
BHEL
RELIND
HDFC Bank
NTPC
TCS
RANBAXY
ITC
Grasim c
Maruti
HDIL
This can serve as an ideal portfolio with a long term outlook with limited downside.
There are many other stocks which can be very high fliers but they have risk of too much of downside.
Anyways unfortunately i realised this very late and invested all my money when sensex went to 17000.
Even my portfolio is bleeding.
I Pray Indian market again become darling of FII's and sensex retraces the journey back to 21 K +
Please give your inputs if you like my post.
This is my first mail to the group.
Thanks and Regards
Nimish Agarwal
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