Exhaustion after sprint? - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Exhaustion after sprint?

Dec 1, 2001

After a sharp run up, bourses globally, seem to have taken a breather this weak. Investors pulled out of equity, taking time to re-evaluate the strength of the global economy. Back home not much was different. At higher levels investors seem to be jittery of the sustainability in the markets, which could have led to participants' booking profits.The rise from the bottom seems to be supported by the foreign institutional investors (FIIs), which pumped in Rs 8 bn in the month of October '01. However, institutional investors, considered to be among the savvier lot, have exited the markets last month. Net investments of FIIs in the month of November '01 were a meager Rs 38 m while mutual funds, as they have done for most of the year, pulled out Rs 3.3 bn. Not that it is a definitive indication; FIIs were investors through the year while markets fell, but does it mean that this category of better informed investors believe that the markets are fairly valued? And any further investments are likely to wait till there is more visibility on direction of the economy, sector reform policy and disinvestments?

It is largely the retail and momentum investors that seem to have built the November rally. Although levels are much lower compared to the heady days of 6k (BSE Sensex), this again seems to suggest that small investors have entered after markets picked up steam. As a word of caution and an indicator of operator activity, we ran a small check on the biggest gainers on the BSE (A-group) over the past month. Of the top 20 gainers, 6 belonged to the infamous K-10 portfolio.

There have been contrasting views on the agricultural sector with few believing that the packed depots of the Government are likely to result in poor crop realization adversely impacting growth in the sector. In our discussions with Mr. Mahesh Vyas, ED, Centre for Monitoring Indian Economy (CMIE), he opines that although a good crop season is good news for Corporate India one should not jump the gun. The rise in farm income to percolate into strong rural demand will depend on a series of good harvests.

  • Interview with Mahesh Vyas, CMIE

    Several participants are espousing the rally to not be fundamentally supported, which has led to shakiness among investors. It seems markets are likely to trade in band till there is more news for investors to make a firm decision.

  • Equitymaster requests your view! Post a comment on "Exhaustion after sprint?". Click here!

      

    More Views on News

    Top 5 Recent IPO Developments You Should Know (Views On News)

    May 12, 2021

    So far in 2021, IPOs in India have raised nearly US$ 3 bn, the best start to the year since 2018.

    How Did Mindtree Perform in Q4FY21? (Company Info)

    Apr 20, 2021

    Here's the rundown on the company's latest quarterly results.

    How the Regulator Is Ensuring That You Can Make an Informed Decision When Investing In Debt Mutual Funds (Outside View)

    Jun 17, 2021

    SEBI recently introduced a dynamic scheme classification concept of the Potential Risk Class matrix for debt funds based on interest rate risk and credit risk.

    Top 5 Stocks Mutual Funds Bought and Sold in May 2021 (Sector Info)

    Jun 17, 2021

    A look at what India's top equity mutual funds bought and sold in May 2021.

    Why is Bullion so Volatile Now? (Fast Profits Daily)

    Jun 17, 2021

    Why have gold and silver prices become volatile recently? Find out...

    More Views on News

    Most Popular

    Hotel Stocks Will Reward Investors (Fast Profits Daily)

    Jun 8, 2021

    This is why I'm bullish on the hotel and hospitality sector.

    My 'Unlock' Investments (Fast Profits Daily)

    Jun 11, 2021

    The best unlock investments you can make in the market.

    The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

    Jun 9, 2021

    Investing in the best stocks could result in wealth compounding on a massive scale.

    How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

    Jun 11, 2021

    Charlie Munger's open secret about investing success.

    More

    India's #1 Trader
    Reveals His Secrets

    Secret To Increasing Your Trading Profits Today
    Get this Special Report,
    The Secret to Increasing Your Trading Profits Today, Now!
    We will never sell or rent your email id.
    Please read our Terms

    S&P BSE SENSEX


    Jun 17, 2021 (Close)

    MARKET STATS