Economic growth could slip to 6.9% this year, the government said on Tuesday, the first time this year it has used a number less than 7% in its comments about the economy and eliciting reactions ranging from surprise to vindication to denial. The Central Statistics office, which puts out the official GDP numbers each year, said on Tuesday its advance estimates showed the economy on course to achieve a growth rate of 6.9% for the year to March 2012. which is sharply below 8.4% last year and if it happens, will be the first time in three years that growth could end below the 7% mark (in 2008-09, it grew 6.7%).
IIP Nos for the month of Dec 2011 showed an downward trajectory by growing at 1.8% YoY (street estimate of 2.6%) v/s 5.9% growth in November 2011 YoY.
In the past also we have seen that the Indian markets have been flourishing just because of the Foreign Institutional buyers. In the Month of Jan the FII have poured nearly Rs.9400 Cr in Indian Equity market. But in from the start of this month there has been an inflow of more than Rs.7900 Cr in just 7 days of trading (9thFeb). And now that’s called a ‘BIG MONEY’. The total of FII inflow from the start of the year is nearly Rs.17300 Cr nearly $3.3bn and that too without any fundamental change in Indian Economy. Since the start of the year FII were Net sellers on only 5 occasions. Numbers are doing the saying. IIP has been on the downtrend, high inflation, high interest rate, low sales in realty sector.
Indian Equity markets once again rallied above 5400 levels, but failed to close above the same. Failing to close above the 5400 levels, Nifty and Sensex fell on the last day of the week. In the week Nifty closed higher by 3% and Sensex closed by 1%. Midcap and Small Cap index closed higher 3%. Bank Index 3%, Oil & Gas 1%, IT 2.5%, Auto 2% & Power 1%. Stocks which took part in the rally were Sail which closed with a gain of 7%, Acc, Kotak, Tcs, Rel Power 5.5%, Wipro, Siemens 5%, Bajaj Auto 7.5%. Some of the midcap stocks which were on a tremendous buying speer were Jsw Holding which gained 61%, Thomas Cook after its stake sale news gained 39%, Ttk Prestige 38%, Sks Micro 36%, Ifci 27%, DB Reality 25%, Dena Bank 22%, Hdil 18%, Gammon Infra 16%, Jet Airways 16%. The stocks that closed in the negative zone were Sunpharma and M&m by 2.5%, Bharti Airtel 9%, Hul 3.5%, Dr Reddy, Idfc & Ranbaxy 3%.
Greek Political leaders have struck a deal on austerity measures, clearing the way for a swap to cut the nations debt and win its second rescue in two years. The accord came less than four hours before euro-region finance ministers were to hold an emergency meeting in Brussels to discuss a Euro 130bn ($172bn) lifeline to Greece and a debt swap that would impose a loss of nearly 70% on investors.
From the high of Mid Oct and from the low in Dec, Nifty have bounced back from that levels to complete the full circle. It has recovered hundred percent. Its marked in the chart with the Fibaonacci retracement levels. It’s clearly seen that how all the levels which are marked have retraced the Nifty from high. Its noticed in the last three days that there has been some selling pressure in the markets but at the end of the day, sudden buying by the FII’s lifted the market. Nifty is now in a overbought zone. MACD at any point of time can give negative divergence, that may lead to some correction. I am not sure about the impact on the markets when FII pull out money. But the amount which they have invested in the Indian markets in the recent past, may sure hurt investors when they pull put. Too much of everything is also not good. In the past 1 ½ month markets have rallied more than 20%. So investors should be cautious and play safe. Book profits on every rise.
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