Amar Ambani, Vice President - Research, India Infoline has given his quote on todays markets turmoil. He said, "Global markets declined last Friday, reacting strongly to a price of US$138 for crude. With a break in crucial support levels in Indian equities and a close in the red on Friday, a heavy market cap loss during Monday came as no surprise. A sharp spike in oil prices stepped up fears of uncontrollable high inflation, already at 8% for India and predicted to rise to 9.5-10%, given recent fuel hikes."
He further added, "Expectations of a slowing economic growth, widening deficits, depreciating currency, high inflation and rise in interest rates describe the current macro economic environment of India. Further, loss of the ruling government in key states and its inability to manage growth-inflation trade-off are clear harbinger of upcoming political uncertainty. Given these factors, there is no astonishment as to why we are witnessing huge portfolio outflows from India. This along with disappearing retail investor participation has been trending the domestic market downward."
"If we discern the macro and political situation, then there is enough evidence to believe that we have entered an intermittent bearish phase. A move to 14,200 on the Sensex and 4,100 on the Nifty seems on the cards in the near future. We are underweight on interest rate sensitives like Automobiles, Real Estate and Banking. The only major risk to our view is a sharp reversal in oil prices in the near future, which appears unlikely", he said.
Source: Moneycontrol.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment