Markets fall across the board

The fall in the domestic markets gone by was really painful. The fall in the markets was seen across the board and mid and small size company stocks were heavily punished. Sensex closed at 19,509 while Nifty closed at 5857 points on Friday. SEBI probe in some companies for price rigging reignited the concerns that there may be some cases which are yet to come. On the global front,this was the week when major developed markets along with emerging economies closed in positive. The disconnect reveals that overhand in the markets was more related to domestic issues only. Further the expected continuance of Bush tax cut for next two years likely to be cleared by US senate in next two weeks will also help in improving sentiments.

Going forward I believe that the concerns pertaining to Industrial growth and in turn overall growth of the economy would not be there after seeing the 10.8 percent growth in IIP for the month of October compared to 4.4 percent last month. Going ahead I believe that even for the month of November we could see the Industrial growth picking up close to 12 percent. The indicators like car sales growth of 20 percent,commercial vehicle sales growing by more than18 percent and HSBC Manufacturing PMI rising to 58.4 in November from 57.2 in previous month gives support to my belief.

Going ahead I think we may continue to see bouts of volatility in the markets as nervousness is still there. In short term now I think the advance tax figures would help the markets in gauging the profitability of India Inc. as the result season is approaching. Furthermore I believe the push factors like QE2,interest rate differential and search for higher yield may continue to attract overseas investors in the Indian markets.

The writer is CMD,SMC Wealth