Market discounting next two quarters’ corporate performance, but the negative sentiments still persist.

Dear Friends,
Inspite of all these carnage in the market place you must not forget that our economy is strong, growing and has ability to sustain growth. Gone are the days of 1990-1998 downturn and almost no movement in the stock market. You are not going to see such a long period of slowdown in the market. It is fast world and look at our markets how fast it fell down from 21000 to 9000 in just 10 months, at the same time how sensex moved from 3000 to 21000 (6x) in just 5 years.

During last 5 years many new sectors like telecom, retail has come up and many more of the existing sectors like media, real estate, aviation etc are getting more organised. What we mean to say is what we were 10 years back, we are not the same old Indian, whole world is counting on us, we are symbol of growth and money is just like water it will find its place; money will see where growth is and India is the place which is still growing at 7-8% as compare to US/UK/Japan which is in -ve real growth.

And note our word, we will sail thru this crisis also. We still agree and believe that by next diwali we will be back on track.
HBJ Capital strongly believe that by next DIWALI we all will be enjoying BULL Market again!!!

Market Update:-
Indian stocks fell further on Tuesday as players sold frenziedly across counters eyeing weak global markets. Worsening outlook, with world economies sliding into recession, dragged the key benchmarks below their major support levels. NSE's 50-share Nifty closed at 2683.15, down 4.16 per cent and BSE 30-share Sensex ended below 9000 at 8937.20, tumbling 3.81 per cent from previous close.

Our markets have already discounted the next two quarters’ corporate performance, but the negative sentiments are so harsh that investors are selling at every level neglecting the fundamentals. Our sense is that Nifty should bottom out around the 2600-2500 levels.

There is a lot of bad news out there which all of us are quite aware of and the concern is that corporates are now facing the heat of capital flows and the businesses that are expected to have them. The markets being the way they are will always discount always in advance so we have already seen massive value erosion.

What we have to pretty much accept now is a bit of a timed value erosion to take place in the sense that the markets have to trade around these levels, there will be points where it may sell off and you will have rational panic points but there will be rallies as well but generally speaking we just need to pass time in zones like these so that we see through what sort of impact corporates might have and then take a more rational view of things.

As per Finance Minister P Chidambaram India's economy will bounce back to 9 percent growth next year as local demand holds up amid a global recession.

Outlook for Wed:-

1. Market trend is downward, at every rise of 3-5% one must add SHORT/PUT position on Nifty.
2. Pls do not take any fresh LONG/CALL. In case if you are holding LONG/CALL position exit if market bounce back either due to good global sentiments or due to short covering.
3. At this point of time (Nifty ~ 2683) also one can take fresh SHORT/PUT position if market open flat. In case of any major gap-down opening wait for bounce to add more SHORT positions.

-Sandeep Jain