Sunday, June 15, 2014

Markets take a pause

The markets after having run up on expectations took a pause this week. Correcting about 0.5pc, The Nifty was hardly a representation of the true picture with many of the mid caps showing larger correction. What is next in store?

1. The FIIs were sellers only on Wednesday. they bought 1100 crores on Friday and buyers during the rest of the week too. This means the flow inflow contiues.

2. Iraq was run over in some parts of the country by rebels. This led to Oil spiking and markets correcting. Even more interestingly, Iran is willing to support Iraqi troops with own troops under US guidance. This is an event which is unbelievable but if this axis comes true expect crude oil prices to collapse in the long term.. This is perfect Game Theory scenario where each party has no choice but to co-operate to survive.

3. Iraqi effect on markets usually will be a short term flash in the pan event. I have noticed in the past such International flare ups quickly lose their impact o markets like Ukraine Russia or the Syrian crisis.

4. The Modi Goverment has realised the ecoomy is in worse shape than initially believed to be. It is like the treasury has been looted for 10 years ad empty coffers left. This will call for some tough measures in the form of subsidies beig reduced.

5. Modi brings his own luck and if Iraqi crisis fades soon  then diesel subsidy the largest of the lot amongst Diesel, Petrol and Kerosene will fade on its own.

6. The Budget is in the middle of July and soon, especially after this expiry is done with we can expect a pre-Budget rally on hope.Hope is the biggest thing in which markets rally on.

7. The markets has supports at 7489, 7400 and deeper down at 7223.

It is a buy on dips markets and we may be getting 1 more opportunity to buy the dip.

2 comments:

  1. what are the shares benefit mostly from Diesel deregulation? who will take hard hit? if not this year, certainly next year? so wanna prepare.

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  2. Refiners are the primary direct beneficiaries as outright losses curtailed. Upstream companies also subsidy burden comes down, so secondary beneficiaries.
    IOC is the biggest beneficiary

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