Mr. Udit Mehra's Comments

Hey, Naveen

I agree with your view on the market sentiment of India with that of the U.S., however, I think the market will go up for around a day or two and then we might again see a downward trend, but what will happen after the losses are recovered, will there be a buying spree again? Will the fed holding the benchmark interest rate have a positive effect? The crude and the gold are currently positively correlated, gold have fallen by -25.80, due to low demand of gold and gold companies producing less of gold, what's your view on that? Now let me finish up asking more of questions as I think I have troubled you a lot by asking a lot many.

Hope to get answers for some of the questions...-) and I think all of us who are reading these interesting insights provided to us by Naveen should contribute from their side also to make this a good discussion to clear our apprehensions about the markets.

Thanks and Regards,

Udit Mehra

My Opinion to Mr. Mehra's Comments

Thanks for initiating a discussion. Actually I want response from readers so that I also start thinking more...
One request to Mr. Mehra please post your comments on my blog directly instead of mailing to me. Because my other readers also come to know it, if you post in blog...
Now coming to comments, ya you are right our market will be up for one or two days depending upon the yesterday's Fed's decision. But I think there is vicious link in between this. See as you also know Fed is in very critical condition, it cant increase Federal rates since already the problem of recession, lob losses, credit crunch is hunting the US. And at the same time they cant reduce it also because of inflation queuing up. I think for short term period its a positive news for manufacturing, banking and service sector shares in the financial markets. And as I mentioned in my previous post we are in range bound market. I think market is bottomed up, so there is going to be two steps up and one step down because of profit booking. And now in our market majority buying is by Domestic players like LIC and MFs. So I think once FIIs and retail investor start then only there will be stability we can see.

About Gold. I remember my Dad's words, he use to say that, Gold has always been a Hedging measure against inflation. So as you said, Gold, Inflation and now Crude oil prices are positively correlated. Since Crude is coming down, I think inflation is stabilizing around 12-13% there is going to less demand in Gold. If the crude reaches double digit figure as many analysts are mentioning and by 2009 start inflation will start coming down(Because of Base year effect) the gold rate will come further.
But all this will be matter of another 4-6 months... Lets wait and watch...

And enjoy reading and keep on commenting.................