Dow fall more than 700 on fear of bailout vote failure - India to follow global market trend!!!

Indian Stock Markets are expected to follow US Market, if DOW bounces back from its low then one can see bounce in asian market else we will continue to fall further!!!

Looking at the current turbulent market, especially the fall in Indian market on monday when Nifty fell more than 3%, and US market down 3-4% in early trade. There is liquidity crisis in the market, FII are selling, MF or Insurance or HNI are not ready to support or buy.

Everyone lack conviction and everyone believes that market is going to fall further more and more. Under such scenarios, no earnings or PE works well for market, sentiments become King and changing bearish view is very difficult now.


--------------------Global News-------------------------

• The stock market plunged precipitously, with the Dow Jones industrials down as much as 700 points, as traders feared the financial bailout package would not pass the House. The Dow fell 705 points, then regained some ground to trade down 462 at 10,681.


• As the vote was shown on TV, stocks plunged and and investors fled to the safety of the credit markets on fears that the financial system would keep sinking under the weight of failed mortgage debt.


• This Bailout of the Century will probably do little to make life better anytime soon for the taxpayers footing the mammoth bill.


• The economy is likely to continue its down drift, with all the hallmarks of a recession. If strained consumers expecting some kind of immediate relief grow cynical when it doesn't arrive, it could even deepen a downturn as consumer confidence quakes once again.


• Beware a sucker's rally. Wall Street has basically been banking on a bailout, which means the markets would have tanked if it had fallen through. But any surge in stocks could be short-lived, because the global economy is still weak and possibly getting weaker. "After markets settle post-bailout, we do not expect substantial improvement in underlying economic conditions".


• The bailout could boost market confidence, because investors will no longer have to guess whether the feds will help troubled companies. That might reduce the manic market swings we've seen in recent weeks.


• But the bailout could also backfire. If economic conditions get much worse, it will appear that even an epic government intervention couldn't stop a financial meltdown. And the feds won't have too many more levers to pull.

-HBJ Capital Team