Markets post US President visit

The world markets are being fuelled by liquidity while in India it is expectations from what Obama will do for or with India. The ECB announced a quantitative easing which is bigger than what the FED did in the US a couple of years ago. Greece sees a change in government and the threat of turmoil in the European Union was never greater. While our benchmark indices saw the SENSEX and NIFTY gain 4.11% and 3.78% respectively, the MIDCAP and SMALLCAP gained about half a percent. This clearly indicates that the momentum is about to peak and this week would e a good time for that to happen.

Buy the rumour and sell the fact or sell on news is what is likely. The Nuclear agreement signed many many years ago but not implemented on account of civil liability has been cleared in talks on the laws of Hyderabad house. Probably this news could cause the blow of and then the imminent correction. We also have the January series expiring in three days’ time and at this moment bulls are sitting very pretty with a gain of 661.50 points or 8.09%. Historically markets have rarely closed with such monthly gains and some correction would be in order.

The whole world is bullish on India and there are umpteen comparisons between the economies of India and China. The one difference which comes to mind is that China has delivered a certain level of growth and is well placed currently. Its size of economy is substantially bigger than India and even though we may grow faster than China to catch up is a couple of decades away.

In conclusion while I am bullish as much as anyone else, we have too many events coming up and the present momentum seems difficult to sustain. While shorting the market may be ii advised, it makes sense to take money off the tale and buy only on dips which are at best a couple of days away.

Wishing all a belated Happy 66thRepulic Day to all readers.

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