Sun 18th: This was predicted earlier (the fall)

In the past this writer has mentioned endless time that the Indian Economy is going down the drain with endless reason to justify. Political issue is the main reason. Lack of control on the Scams. Failing to get the Black Money back to country. FDI could have helped the Indian retail and the Farmers and most of all the Citizen of India by proper pricing of the food articles. Tough the real numbers of Inflation are down by the essential commodities prices is sky rocketing. IIP numbers are near their worst. Rupee is on its all time low. Interest rate is soaring high. Real estate guys are sitting on huge inventories. Etc etc. With all these negative, how can an Economy going to function properly. FII have been pulling out the money from the Indian markets as if there is no tomorrow. The only thing I can say is that the country have been downgraded by many foreign and local Research houses that leads to outflow of money from the country.

This writer had informed in the past also, that technically Markets are not going to cross recent high. That there will be too much pressure for the markets to go up and we might see markets making new low.

Last week the Government cut its growth forecast for the year to around 7.5%. But according to me even that looks difficult to achieve the same after looking at the latest IIP data released this week. IIP numbers shrank 5.1% in October, far exceeding forecasts of a 0.5-1% decline. Markets tanked nearly 2% on Monday after the release of the data. The Economic situation in India is going bad day by day.

Rupee depreciation has left scar on many companies, specially the oil importing. Rupee worlds worst currency on 5 day basis it was down by 4.5%. Finally RBI steps in to curb the falling Rupee. Rupee bounced back on Friday but the same could not impress the markets. Nifty closed at 4651 down by 95 and Sensex at 15491.

Indian Markets collapsed more than 4.5% in the week. There are huge numbers of stocks which are trading at their 52 week low. But there are some stocks which are sailing against the tide and made its all time high. Hindustan Unilever scaled to all time high in such a negative markets. Almost 190 stocks on Nse are trading at its 52 week low.

Midcap and Small cap Index fell 6% each. In the Large cap stocks Lnt, Pnb, Sail, & Sbin fell more tha 10%. In the ADAG group, Rcom, Rpower & Relinfra all close down more than 10%. Bhel, Dlf, Axis Bank, Icicbank & Tata power fell in the range of 7-10% each. Power Sector closed down 6% Auto 5%, Realty 9%, Capital Goods 10%, Metals 7% & Oil & Gas 5%. In the Midcap Sintex lost the most which closed down 33% in a single week. Areva 28%, Pantaloon 23%, UB Holding19%, Fortis 18%, Wockhardt, Fortis, Renuka Delta Corp, Suzlon, Punj llyod, Chambal, Jet Airways, United Breweries fell in the range of 15-17% each.

There was expectation in the market that the RBI could cut Rate on Friday. Which according to me was not possible as the rate hike was due to rise in inflation numbers. Now the Inflation has not come down so much that there could be rate cut. The only thing I could think was no Rate hike, but surely no Rate cuts.

Nifty made a new low of 4628 which we haven’t seen since last 2009 Nov. Nifty made its new low. Break below 4600 levels we might see some more selling till 4400 levels.

Sun:11th Dec 2011

S&P’s has warned it may carry out an unprecedented mass downgrade of euro zone countries, including Germany and France, if European Union leaders fail to deliver a convincing agreement on how to solve the regions debt crisis in a summit on Friday.

After an awesome rally in the last week Indices this week corrected more than 3%. Its been a very week. Nifty and Sensex lost 3%. Midcap & Small Cap Index closed down 2.5 & 2% respectively. Realty, Metals & Capital Goods indices lost more that 5% in a single week. Oil and Gas & Power indices closed down 4%. Auto and Bankex lost 3%.

In the stocks one of the major looser was Pantloon which lost nearly 15% in a single week after the setback in FDI in retail. Shoppers stop lost 7% & JP Ass lost 15%. Renuka too lost more than 13%. Bgr Energy 12% & Koutons 11%. Jet Airways and Guj Pipavav lost 10%. Sesagoa, Bharti, Reliance Power, Sterilte Ind, Reliance, Reliance Infra, Bhel, Ranbaxy, Coal India, LT, M&M, Jubilant Foods, Shoppers Stop, delta Corp & Educomp closed down in the range 6-10%.

The major attraction is on the weekend when the EU unions will have to deliver convincing agreement on how to solve the ongoing crisis in the EU. On failure in doing that, there could be major downgrade from the rating agencies which will impact the markets more. Indian markets have also been downgraded by major broking houses. FII’s are pulling out money from the Indian markets on back of instability of government. Few weeks back I have mentioned about many reasons for which the FII’s will pull their money back. Scams played a major role in that.

Rupee closed at 52 vs $. Inflation numbers this week were down as compared to last week. But the real numbers has not come down.

Last week this writer had mentioned that the volumes are really dry in the markets and we may see markets turning lower. The last few trading sessions have been very very volatile. Traders finding it difficult to trade in gap up and gap down trading session.

The last weeks bounce back was just like a dead cat bounce back. In the chart we can see that Nifty is trending downwards and we can see Nifty making new lows in the coming week.