Global markets are in a correction mode and India is no exception. While falling crude oil prices is great news for oil importing countries like India and the world, one must also remember that some of the exporters are also investors in global equity markets. Prices at some point when away from reality hurt all. Coming to our markets they fell between 3.5% to 3.85% and excepting the BSEHEALTHCARE which was up a tad, all sectoral indices were in the red with capital goods, realty and oil and gas sectors losing about 7.25%.
The markets are correcting and this is not any big thing. They were overheated and there seemed to be optimistic exuberance with open interest in the December series higher by 13% compared to the November series at Rs 83,200 crs. In economic news consumer inflation at 4.2% was the lowest since the new series began in January 2012 while IIP was a negative 4.2%. The fall in inflation was welcome while IIP was below expectation and now clamour for rate cut will grow.
Whether the same will happen or not only RR can tell. Infosys founders sold shares worth over a billion dollars and the bulk of the same was bought by FII’s. This deal happened on Monday the 8th of December and effectively over the next four days FII’s were net sellers of about Rs 1700 crs. For the week considering the Infosys purchase their net purchases were Rs 3,240 crs.
The correction is likely to continue during the week though this time it would be more volatile unlike last week where it was down one way except for a small recovery midweek on Wednesday. It makes sense to buy fundamentally strong stocks midweek when the correction has taken its toll.
Markets always give everyone a chance, but they seldom give a second chance. So all the fence sitters who wanted to buy on a correction, this is the week to do so.
Have a great week and get set for Christmas and then the New Year.