What happened on Wednesday in the Indian Market?
- On Wednesday after gap down opening of 4-5%, Indian Market bounced back due to the news related to co-ordinated effort planned by leading central banks like Fed, ECB and BoJ to inject liquidity of $180 billion to deal with the financial crisis. So, recovery of close to 5% from down seems to be more than the significance of news.
- Such type of news case when Bear Stearn was falling, but you have see what happened after that.....this time is diff, here you will not get 2-3 months time to see the next fall.....cascading effect has started and many more in pipeline will fall. One can expect at least one major bank or FI falling per week, So stay away from market or SHORT it.
Tell me HBJ Team, What Shall We do Now?
- In case if Indian Market opens with gap up on Friday, just wait for its peak and SHORT the Nifty, because market will not be able to retain the gap-up gains, from US market +ve clue Nifty is likely to open +ve but it will close flat or even down.
- Indian market bounce back has given a great opportunity to traders to SHORT the Nifty from high, because such type of help from central bank are not going to solve the inherent problem. If market moves up again, then wait for rise and keep SHORTING Nifty in small lots. As long as FII are selling this market will not recover from pain.
- Length, breadth and depth of financial crisis is very big and most of the financial institutions are going to fall sooner or later. So, the best strategy now will be to SHORT the market whenever it bounces back.
Will the US market cool down for sometime due to central bank's funds?
- Just look at the DOW, how it reacted today after this news, Asian and European market bounced back from 4-7% down, but US market is showing hardly 2% gains, Why? Because they understand the real problems, it is just a matter of time Morgan & WM is next to fall, just keep watching.
- When two elephants fight, it’s the grass that suffers. And when the same pachyderms (Elephants and sometimes for Rhinoceros, and Hippopotamus) fall, you can well imagine the quantum of collateral damage. This week of September (HBJ Capital has already warned this!!!) perhaps will go down as the blackest week perhaps in history of Wall Street, when the collapse of Lehman Brothers and distress sale of Merrill Lynch caused ripples through the globe.
- Following the news of Lehman Brothers declaring bankruptcy and Merrill Lynch falling into the arms of BankAm, Indian equity markets saw heavy selling by leading investment banks.
- "In line with the global cues, Indian market recovered smartly after the sharp gap-down opening for the third consecutive day. The news related to co-ordinated effort planned by leading central banks like Fed, ECB and BoJ to inject liquidity of $180 billion to deal with the financial crisis, did provide the much needed positive trigger to equity markets globally".
FII Selling, Will it stop soon?
- No, it will not stop, and note down that FII are selling in Spot market mostly means they really need cash. Someone who has not sold during last 8 months of bear market is selling now means they are in do or die situation. Morgan, Goldman Sachs, Merrill Lynch, Macquarie and Citigroup all are facing severe pain!!!
- On Wednesday, Morgan Stanley Mauritius Company, an arm of the world’s No. 2 investment bank, sold stocks worth Rs 871 crore, accounting for almost 8.5% of its total holdings in the country valued at Rs 11,200 crore.
- The panicking FIIs seem to be desperate to exit their positions as it is quiet evident from the increasing list of bulk deals on both the NSE and BSE where they have been selling the past few days.
- Morgan Stanley, which sold quite a bit on Wednesday, showed up an even bigger selling list on Thursday. The other FIIs that have offloaded include Goldman Sachs, Merrill Lynch, Macquarie and Citigroup. However, Deutsche Securities was seen buying.
- The FIIs have sold close to Rs 8,400 crore in equities in a week and the Sensex has tanked more than seven per cent.
Rakesh Jhunjhunwala Optimistic!!!
- While Indian markets have breached previous lows of August 2007, the long-term prospects of India are still strong or so believes investor-trader Rakesh Jhunjhunwala. In an interview to a business channel, he has stated: “I don't think the long-term Indian stock market has ended. I think it’s in interruption mode.”
India’s benchmark stock index fell for a seventh day.....
- Its longest losing run in almost eight months, as a US bailout of American International Group Inc. failed to ease concerns that credit-related losses will cause more financial failures.
- Indian shares recovered from a 5 percent fall in the opening session to end slightly higher on Thursday, as fears were allayed after the world's leading central banks offered to pump billions of dollars into global money markets to soothe the funding crunch caused by upheaval on Wall Street.
Why Gold is going up during last two days, even if crude falling?
- Whenever there is economic uncertainty like recession, war or FED printing more dollar, gold prices because of most trusted commodity are likely to go up. Crude is falling due to fear of slowdown in US.
-HBJ Capital Team
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