Epaper
Dalal Street is poised for a nervous opening, trying to recover from the crash yesterday. The investor sentiment is at an all time low. It is really hard to find buyers in the current market. The market currently lacks liquidity as the retail investors are staying away from the markets and the FII’s have been consistently selling in the past week. Bear Stearns a.k.a BSMA and Merrill Lynch played their role in damaging yesterday’s session. It appears Merrill Lynch is in “Quit India” mode. Such funds should be shunned by the investors in the mutual fund segment.
The US markets did not plunge as expected,the Dow Jones industrials, in an erratic session, closed up 21.16 points, after having plunged nearly 200 points early in the day.Nasdaq took the opposite direction ending down 35 points or 1.6 percent at 2177.The Fed Reserve, which is expected to meet on Tuesday is expected to cut the interest rates drastically, may be a 100 basis point cut is in the offing against the much expected 75 basis point cut.
Coming to the domestic markets, although the valuations look compelling figuring out a bottom is a tough deal. Investors are skeptic about catching the falling knife. Interestingly there were no advances among NSE-50 stocks yesterday. Today might be a different story as things are settling down in the global markets. we expect the markets to recover a bit in the next two sessions as the correction looks overdone.
Markets might end on a flat note or recover a percent from the current levels. We feel that the bottom is close and getting closer everyday. The only event that could spoil the hopes of a recovery, is a default by another major investment bank as mentioned in our weekly review.