Stay invested, buy on declines
Markets are now on a long lasting upward path The monsoon is progressing very well this year and in case the Reserve Bank dares to cut the interest ...
Markets are now on a long lasting upward path The monsoon is progressing very well this year and in case the Reserve Bank dares to cut the interest rate at the end of July, the markets could be on fire since Infosys has already provided them a spark Rupee continued to cause hurdles in the first two opening days of the week, the stock markets came out of the negative impact of the same and jumped up on other better and positive news and cues during the last week. The net gain attained by the most popular stock market index, the 30 scrip based Sensex, was a modest 463 points over the previous week's closing, it inspired more buyers to rush to the bourses because it once again reached a level which was just 17 points away from the coveted 20K mark level. Although, the Sensex's closing at 19958 was not the best of the day, it certainly was the highest of the past several weeks and only 42 points short of the 20K mark. The rupee was once again battered down and the news from the global markets was also not encouraging when the markets commenced trading for the new week on Monday. It was therefore, due to this reason that the markets opened lower than the previous week's closing and immediately started sliding down with the Sensex falling to a low of 19186 which later proved to be the lowest of the last week as the remedial steps being taken by the RBI did work to initially arrest the downfall in the rupee and then lift it up a little. Markets received yet another jolt in the beginning of the week, as the finance ministry asked RIL to provide natural gas at pre-hiked prices for the production shortfall. RIL shares, which had entered into buying frenzy, was made to tumble down on this demand. Besides this shocker to the market leader, RIL, it was a sustained firmness in the world crude market over the past two weeks. Because of the downfall in rupee and rise in the crude oil price, inflation is feared to jump up further and the market men feared that because of high inflation, RBI will have no option but to keep the interest rate unchanged when it reviews monetary policy at the end of the instant. However, with the Federal Reserve chief Ben Bernanke coming to the rescue of the global stock markets and also Veerappa Moily, the Union Oil Minister coming to the rescue of the petro giant Reliance, the things turned out to be positive and then came the ignition to a uptrend by Infosys Technologies that churned out better numbers for the first quarter ended June and encouraging rupee guidance for the future working of the company. The results announced on Friday before the markets opened, not only helped the markets look up further but also provided a bullish break-out to them as the major indices including the Sensex opened with a gap up and closed higher than the day's opening. However, various numbers and data released by the government pertaining to inflation, IIPs, exports, inflation on Friday have not been in favour of the markets going further up but they are not going to cause a big hurdle because the data relates to a very short duration, month after month and therefore, subject to be changed. Also, the current account deficit has fallen by significant proportion which is expected to help the rupee to stabilise. The markets are agog with an idea that the Reserve Bank this time also may not change its stance and not cut the interest rates. But in all the probabilities it will have to heed to the wishes of the Finance minister himself. The monsoon is progressing very well this year and in case the Reserve Bank dares to cut the interest rate at the end of July, the markets could be on fire since Infosys has already provided it a spark. Stay invested in blue chip stock, buy more if markets decline. They are now on a long lasting upward path.
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