* Deep Thoughts on Market *

srinivasud · #41 19th June 2006, 09:00 PM

Quote:

Originally Posted by nkpanjiyar

Bull markets are always driven by liquidity. Liquidity is always driven by low interest rates. World over, all central banks are tightening the liquidity, and there are no clear signals that they will stop any time soon. China is the latest country to join the tightening bandwagon.

The reasons global equity markets sold off still remain – Inflation, Oil and Fed. Inflation data came worse than expected. Oil hovers above $70 and Fed policy is now hazier on where they will stop. Fed fund futures have now fully priced in an interest-rate hike at the Federal Reserve's next policy meeting on June 28-29, and chances are at about 70 percent for another increase in August.

India story is still strong. But the issue is - we do not have domestic money tankers to take the market up on our own. We need FIIs support, and that support will depend on global liquidity. So, there’s no point singing a tune (Valuation) that does not move the market.

cheers,
nkpanjiyar

As I am chating with one of my friend about these concers, he simply put forward a question below "We all know that FED will increase its Interest Rates and its happenning since 2001 @25 basis points each and now we are nearing to 5%. (remember market moved to its histarical new highs during this period) Do you expect FED will increase the Interest Rate abnormally say > 1% ? When no such thing will happen in the near future, where is question of FED Interest Rates impacting the Markets? Do u understand the cost of shifting funds from one market to other? It is more than 25 basis points what FED will increase, so from where these so called Institutions are going to gain from the Fed Securities and how much? Today, they might lost more than the anticipated gain from the interest rates, if they really moved funds from the emarging markets back to US."

And asked me to answer above, which I dont have any clue about it.

Hope, you masters might provide some clue?

Srini - London

pkjha30 · #42 19th June 2006, 09:52 PM

Quote:

Originally Posted by nkpanjiyar

Ditto Pankaj. I agree in toto.

THE FII IS VERY RUTHLESS. HE IS NOT HERE FOR OUR HEALTH AND DOESNT GIVE A DAMN FOR OUR COUNTRY. HE HAS COME HERE WITH A PLAN AND HEAVY POCKETS. UNFORTUNATELY FOR HIM HE HAS NOT BEEN ABLE TO TAKE TOTAL CONTROL OF OUR MARKETS (Since there are too many monkeys in India , he underestimated the intelligence and capabilities of the indian langur , in fact in places like varanasi and even the older town area of Mussourie the monkeys have taken over and driven the humans out).

Our country was the "Jewel in the crown " but slowly it is turning into the crown jewel .I wont be surprised if some companies from the FTSE start listing on the Nifty. I strongly believe India will command global economy in coming years.

cheers,
nkpanjiyar

Sure this monkey business will never end

Pankaj

Czar · #43 19th June 2006, 10:37 PM

I had my doubts that we were the trend makers in stock markets since quite a few years...lol

I really think atleast a few markets are just waiting to see what Indian market is doing & do the same...rolf

aca_trader · #44 19th June 2006, 10:44 PM

Quote:

Originally Posted by amitt29

Exactly also I think personally the inflation data that is provided is false.Its way beyond what is projected.And its a worldwide phenomenon.

Does the inscrease in prices of household items make u think so or you believe that WPI figures are fabricated?

Regards,
--Ashish

amitt29 · #45 19th June 2006, 11:06 PM

The data that is released is fabricated.U can make it out.

karthikmarar · #46 19th June 2006, 11:26 PM

Quote:

Originally Posted by amitt29

The data that is released is fabricated.U can make it out.

In my opion one should not make such fleeting statements. The dismiss such data may be optimisim but it is also foolishness...

amitt29 · #47 19th June 2006, 11:50 PM

aca_trader · #48 20th June 2006, 09:48 AM

Quote:

Originally Posted by amitt29

The data that is released is fabricated.U can make it out.

I am too dull to understand the obvious. Can you please explain for lesser mortals like me as to how to understand if the data is fabricated or not.

Thanks & Regards,
--Ashish

amitt29 · #49 20th June 2006, 10:07 AM

I may not be able to explain to you as I am not good at explaining things.
And I end my discourse here.

nkpanjiyar · #50 20th June 2006, 10:25 AM

Quote:

Originally Posted by srinivasud

As I am chating with one of my friend about these concers, he simply put forward a question below "We all know that FED will increase its Interest Rates and its happenning since 2001 @25 basis points each and now we are nearing to 5%. (remember market moved to its histarical new highs during this period) Do you expect FED will increase the Interest Rate abnormally say > 1% ? When no such thing will happen in the near future, where is question of FED Interest Rates impacting the Markets? Do u understand the cost of shifting funds from one market to other? It is more than 25 basis points what FED will increase, so from where these so called Institutions are going to gain from the Fed Securities and how much? Today, they might lost more than the anticipated gain from the interest rates, if they really moved funds from the emarging markets back to US."

And asked me to answer above, which I dont have any clue about it.

Hope, you masters might provide some clue?

Srini - London

Srini, I guess we need to understand chain reaction of Fed's impact.

There is a cost of speculation. If I can borrow at 3% and deliver a return of 7%, it makes sense. But if I get that capital at 5%, it's not that attractive. So, what I am saying is that interest rates above a certain limit makes speculation trading unattractive.

Lack of Liquidity kills momentum, and without momentum, you cannot take prices up. World over all central banks are raising interest rates, which means liquidity is tightening.

US Consumer is at center of world's economic growth. China's spectacular growth is thanks to US consumer. There are fears that this hike in interest rate may derail the US consumer, as its credit driven society, and may lead to US recession, and eventually global recession.

So, moving funds from emerging asset class to safer assets makes sense to FIIs as they are uncertain on what would happen.

Also, equities do not have a fixed price tag, but money markets have.

cheers,
nkpanjiyar

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*** Deep Thoughts on Market ***

* Deep Thoughts on Market *