The markets have fallen for eight consecutive days and a bounce is overdue. Well a bounce seems to be in place and may in all probability happen today itself, however it would remain a mere bounce and act as a date changer before it resumes its downward trend. Results from the core economy seem to be bad and reflect the state of the economy. Coal India reported dismal results and the under pressure share would see further pressure today. The share closed on the BSE at Rs254.55 and is a mere 3.75% from its IPO price of Rs 245. One would remember that on listing day the stock had debuted at Rs 342 and made its high at Rs 422.30 before falling over the last few quarters to be almost where it all began.

The crisis in NSEL or National Spot Exchange of India Limited seems to be increasing and one hears from the media that the payment would be in tranches spread over quite a few months. The sum involved is Rs 5,500 crs but would have a domino effect as the investors are arbitragers who have invested in a twin contract having first purchased the contract and then sold it for 25/35 days. They are mere investors and are concerned with their returns which averaged between 12-14%. These investors had found a better way to make returns than the traditional fixed deposits and money markets and the same was considered safe. The trade guarantee fund of the exchange was reportedly around Rs 800 crs and the same was quite healthy at 15% of the open interest. What went wrong and how the issue ballooned is there for all to see.

Shares of Financial Technologies the promoter of NSEL lost a staggering Rs 415 or 73.32% to close at Rs 151.10 while group company MCX was locked down at circuit for the last two days losing 42.03%. What would happen to the shares of these two entities is a matter of conjecture but news flow in the media is not comforting.

The Rupee was another sad event with the rupee plunging Rs 2.06 or 3.49% in the week to close at Rs 61.10. It was a big fall and very clearly unnerved the markets. The markets lost around 3% but the biggercasualty is the midcap and smallcap stocks which seem to have been hammered out of shape. The SENSEX is down 1.3% since the beginning of the calendar year but the BSE MIDCAP is down 23.68% while the BSE SMALLCAP is down 29.84%. With values being chopped of theseindices so severely no wonder the interest in the markets seem to be waning and no valuations seem attractive to buy

Parliament’s monsoon session begins from today and this would be the shortest session and with the most number of bills to be discussed. One is not sure how many of them would see the light of the day but very clearly for the ruling UPA the food security ordinance would be the most important.

Tough times ahead with a bounce certainly on but wait for the investments.