At the outset, let me wish you all a very Happy New Year.
After ending the 2011 on disastrous note with Benchmark Indices Nifty going down by 37.5% in Dollar terms and eroding close to 20 lakh crore of Investor wealth in single calendar year, things are not looking any better either while we make step in to new year.
Interest rates are high,Fiscal deficit will overshoot its target and might go upto 6% of GDP, Investor sentiment is at all time low that’s why we are not seeing any fresh buying emerging even after such a massive fall in markets.
Sensex is trading at 12 PE on earning projection for FY13, which is historically on the lower side of the range, and adding to woes of Central Bank rupee has depreciated by 16% this year which makes life hell for RBI, which is solely fighting inflation with monitory policy.
On the other hand Global environment is also looking gloomy, with Euro zone ‘s debt crisis will continue to haunt global markets and decline of Euro to an all time low against dollar will compel investors to park there money in Commodities and precious metals like Gold and Silver. So no respite for equity markets as the first half is looking very tough for the markets in 2012.
On the domestic front Government has led down on every front, markets have been zotted by massive unearthing of 2G scam and corporate biggies spending their time in prison to huge inflationary pressure on the food articles and adding to woes the Govt. inability to take any policy decision for economic reform, the way govt. took the issue of FDI in retail was like inviting somebody for lunch and when they accept the invitation you say i was just joking.
Technically speaking we are in middle of nowhere, markets have been trading in bearish territories for so long and i don’t see markets getting out from the clutches of bears.
i am not posting any charts as there is nothing new emerging in terms of chart pattern, what markets are likely to do in the next one year will be more determined by the action taken by Govt. and RBI.
Any start of rate cutting initiative by RBI will boost market confidence and i believe it might happen from this month onwards.
I am ready to hang my neck out and say we are very near to bottom and probable range for SENSEX for 2012 might be 14000 to 20000 as i see a recovery staged in second half of 2012.
but