September 2012

NSE NIFTY and BSE  SENSEX .... monthly levels ... full levels by evening ....

Trading levels 3rd / 7th September 2012




Yesterday, Mr Bernanke announced his intention for providing further STIMULUS without getting into any specifics. Market seems to be happy with this intent as the US markets moved up by nearly 1 % immediately after the announcement.

Now we have to wait for ECB announcement from Mr Draghi by middle of next week.

I feel that nearly 80 % of the positive impact of the possible ECB announcement is already factored in the current global market levels and there is not much upside which can be expected from where we are now. However, if Mr Draghi disappoints – as he did last time – we may have a 2 to 3 % cut immediately followed by another 3 to 4 % cut in the coming days / weeks.

Only NASDAQ COMPOSITE and AUSTRALIAN index have still not given indications of a possible down side… all other big indices including S&P … which was holding firm till last week … have thrown in the towel.

Back home, our PM’s statement about infamous COAL-GATE probably raised more questions than it clarified. The main opposition party BJP is not budging an inch and now it seems all out war between Congress and BJP.

Result is that all legislative actions are now postponed to winter session of the Parliament. Some executive actions can be taken in the intervening period but the government has to show considerable POLITICAL WILL to act.

Selling ATM calls would have given you some money last week as well. You may continue with that strategy with suitable stop-loss as this is still the first week of the new settlement.

FIIs continue to buy … although in small quantities …. that has not allowed markets to sag. But the drift which has started last week will gather momentum if there is no big bang announcements from ECB.