subject: Discussing some domestic and international issues [print this page] Discussing some domestic and international issues
The week ahead (6th Dec- 11th Dec)
For the Week Ahead 06-12-2010
To,
The Patrons & Readers
From the Team of www.tradeprofit.in
Domestic Issues: - The News flow on Domestic front is quite strong & many corporates have been hit by these non economic news flow & all for wrong reasons, But these news flow will indirectly create more stringent norms for corporate borrowers. Which in turn will create an impact on infrastructure companies which have long gestation periods & debt to equity ratio is skewed towards debt. This will certainly have an impact on the profitability of these companies. On inflation front there is some good news that food prices have started to stabilize & cement prices have started to drop. The over capacity in cement will dent the profitability of cement companies & it will take some time before this sector comes out of the shadows of overproduction.
International Issues: - In Tradeprofit Team View markets will try to focus on ECB & Feds action & comments. Mr Bernanke is hell bent to give free flow of Dollars to the markets till a bubble is created in the markets. In his recent Statement he has indicated that they may exceed QE2 of 600 billion Dollars. The impact could be Dollars reversal & more fund flows to Emerging markets. On the other hand ECB started to buy bonds of the countries which are in peril.
In the real sense true economics is not the game anymore but interventions by Government authorities are keeping the markets on the roll & nobody knows how long they will keep supporting the markets till then its a one way journey. But as everybody knows bonds, equity, commodity or forex every market will discount this phenomenon in advance as we did in 2008 before the actual collapse started taking place.
Nifty: - BreakUP & Break Down levels 6180-5880
Ayur
For the Week Ahead 29-11-2010
To,
The Patrons & Readers
From the Team of www.tradeprofit.in
Domestic Issues: - The barrage of news is keeping markets on its toes, Volatility in markets are high & it will just rise further in coming days. Markets will react to all sorts of negative news with more intensity & positives will be taken with a note of caution. The negative sentiments are dominating the markets & good news or clarifications are just small supports. Rupee is depreciating which makes FIIsmore venerable to the fall. If Dollar gathers momentum then FIIs will try to sell & get a exit at faster pace than they are doing now. The picture in Tradeprofit.in View is still unclear as things are progressing in very fast manner.China & Dollar are holding key for the markets. These 2 factors along with domestic news flow will decide the very near future of our markets.
International Issues: - As Tradeprofit.in had stated in our previous International issues aboutPIIGS & Yuan appreciation both the points were highlighted by the markets.China stocks indices retreated sharply on fear of Government would take aggressive stance & Yuan appreciation would hit exporters. In our view Chinawould have to exit its loose monetary policy & moderate its growth.The sooner it is done would be good for China & the realignment of World growth too. Otherwise it would create a bubble bigger than SUB Prime which would eventually cause depression world over. The speed of monetization of assets inChina & the role played by the Government to make the local bodies or regional Governments afloat will cause lots of pain financially & socially.
The Clash of Titans (USA v/s China) is creating multiple & confusing dynamics in the markets. Both countries Governments are reacting heavily in the natural functioning of the markets which is creating distortions. The question is who will budge first so that other may have its way.
