There was no respite seen from yesterday's disappointing rally. The Dow Jones lost 500 points yesterday. There is panic across the globe and crude falling to around USD 91 per barrel will not help or support the market rally today. One should gear up for a rocky ride in the market ahead.
After Black Monday comes Black Tuesday. No respite at all from the global space. For a moment last night those who were watching, before midnight it look like the US might away with a small cut but it not to be. This morning one is presented with the biggest cut in the US markets since 9/11, it is 500 points down on the Dow Jones index, every Asian market with a couple of exceptions is down at an average of 5%. So it’s bleeding badly across Asia; it bled badly across the US and it doesn’t make smite of a difference that crude is collapsed to USD 91-92/bbl. This morning there is panic across the global arena again. So fasten seatbelts for another rocky ride coming up, starting 10 o’clock.
On global markets:
I think people will be disappointed because at one point it looked like that the US market might just recover because it got the early blow and then it was just ambling along 200-250 points down and we got the feeling that maybe the market have reconciled themselves to the Lehman episode maybe it was focusing more on Merrill but by the end of it all had broken down once again.
I think the note on which the US markets closed will make us nervous once again. We did try and claw back yesterday but we will get hammered back to where we came from yesterday again. One can see the sense across Asia despite expectations of a Fed rate cut and some amount of relief today, I do not think those things are helping very much.
There is some panic, which is going around globally; it is a big scare typically these kind of scares get over in two-three days because they exhaust themselves on the way down and that is the only hope one can have but this morning I think we are clutching at straws. It is really bad environment for our market as well.
On our markets:
Once again we will be sub-4,000 Nifty and that is psychologically quite debilitating. We thought we had got away from that and we may not be able to run just yet but at least a slightly more respectable range was going to be held by the market. A lot of the sentiment which had got constructed over the last month or two since the July crash has got washed away in just one week and that’s the sad part.
People were beginning to feel that we have seen the worst of the price damage and once we can get through three-five-six months of this kind of sideways movement grind, then the markets might begin to move up again and that sentiment has got big jolt again. There is fear once again; there was no complacence in the market but there was a slight degree of confidence which was building up and that’s got shattered over the last one week.
This is how bear markets typically operate; they just lull into a temporary sense of relief and then they hammer and kill once again. That’s pretty much what’s gone on over the last five day in global markets now not just in India. I do not know about the near-term as we have been saying for the last two days. When we get to these kinds of panic stages often they exhaust themselves and sharpest kind of rebound. I do not know whether that is lurking in the next day or two but even if that were to come about fewer people will trust it on the evidence of what they have see playing sine July.
The bad or worst thing which has happened over the last one week is not the price damage; it’s the reiteration and the reconfirmation that we are still in a bear market and we are nowhere out of it just yet.
Asian Indices:
It is not very pretty across Asia as you would expect after that bigger cut so that the Nikkei is sinking to multiyear lows out here, the Hang Seng is down more than almost 1,100 points, China is down about 3% that cut is not very big but other markets are down deep in the red as well. 5% in Korea, Taiwan is down nearly 5% and the market, which was open yesterday.
Source
Moneycontrol.com
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