Where are the markets headed?? Will sensex cross the earlier highs??
This is a question lot of investors have in their mind after the fall we had seen in Indian markets. Sensex itself has fallen from 21000 level to now around 17500.
In India, we will only see 22-24% earnings growth in FY08 and 15-16% in FY09.
The first half of the year will be pretty volatile and the market might even see the lows of 14k on the sensex. Second half should be good and I expect the market to be rage bound and it might touch the highs of 21 K. What we should observe here is that 21 K is the earlier high and market might not move beyond that.
All markets world wide had a great rally last 1-2yrs but if we go deep into details on each market we would understand the reality.For example, S& P had gone down by 20%, but it hadn’t gone up all that much,whereas the emerging markets are essentially way overboard and way over their long-term trend lines. So I think that in many cases, some of the emerging markets could still drop about 30-40% from the present levels.
In precious metals, we had a very strong bull market and an even stronger one in industrial commodities, Gold as a commodity seems to have peaked up and taking into consideration the situation in US economy I feel Gold should see more highs and is a good commodity to hold for the long term.
On the economy front we should understand that emerging economies especially in Asia has become less dependent on the US than it used to be in terms of its exports. Today if there is a recession in the United States, the drive towards outsourcing and cost cutting could actually be increased and emerging economies will get the benefit.
US hold around 30% of the world GDP and are the biggest consumer of goods supplied to it from around the world. Going forward we can expect a decline of around 5% in the consumption due to recession which might not affect the emerging markets exports much,
Apart from what I said above we should also understand that the internal consumption is increasing in emerging economies, take for example the first time car buyer's data. In China 84% are first time car buyers and in America it's only 1%. So the market potential in Asia in terms of consumption growth is still very high, not only in China, but also increasingly in India. May be over the next 10-15 years, Asia will become very independent from the United States.
Whatever the volatility in the markets, a strategy to stay cool and invested for 5+ years make lot of sense. I think all the investors should invest now with proper staggering for the next three months.
In India, we will only see 22-24% earnings growth in FY08 and 15-16% in FY09.
The first half of the year will be pretty volatile and the market might even see the lows of 14k on the sensex. Second half should be good and I expect the market to be rage bound and it might touch the highs of 21 K. What we should observe here is that 21 K is the earlier high and market might not move beyond that.
All markets world wide had a great rally last 1-2yrs but if we go deep into details on each market we would understand the reality.For example, S& P had gone down by 20%, but it hadn’t gone up all that much,whereas the emerging markets are essentially way overboard and way over their long-term trend lines. So I think that in many cases, some of the emerging markets could still drop about 30-40% from the present levels.
In precious metals, we had a very strong bull market and an even stronger one in industrial commodities, Gold as a commodity seems to have peaked up and taking into consideration the situation in US economy I feel Gold should see more highs and is a good commodity to hold for the long term.
On the economy front we should understand that emerging economies especially in Asia has become less dependent on the US than it used to be in terms of its exports. Today if there is a recession in the United States, the drive towards outsourcing and cost cutting could actually be increased and emerging economies will get the benefit.
US hold around 30% of the world GDP and are the biggest consumer of goods supplied to it from around the world. Going forward we can expect a decline of around 5% in the consumption due to recession which might not affect the emerging markets exports much,
Apart from what I said above we should also understand that the internal consumption is increasing in emerging economies, take for example the first time car buyer's data. In China 84% are first time car buyers and in America it's only 1%. So the market potential in Asia in terms of consumption growth is still very high, not only in China, but also increasingly in India. May be over the next 10-15 years, Asia will become very independent from the United States.
Whatever the volatility in the markets, a strategy to stay cool and invested for 5+ years make lot of sense. I think all the investors should invest now with proper staggering for the next three months.
For all the talk about a slowdown in the economy, real estate prices in most parts of the country have not corrected as much as most prospective buyers would have liked them to. But, shares of most real estate companies are not finding any takers even after falling nearly 50% from their record highs in January this year. This would suggest that the ongoing sell-off in real estate stocks is a good opportunity for bargain hunting. Yet, most brokerage houses are advising their clients against doing so, as they foresee testing times for the sector in the near term. In fact, many of them are recommending that existing investors cut their losses right away as they could be in for a long wait for share prices to come anywhere near their lofty highs.T he sharp rise in real estate prices, coupled with high borrowing costs has let to softening of demand. The slump in the stock market, too, has contributed to the trend as many investors were earlier routing their gains in share trading into real estate.Industry experts feel that companies that have managed to buy land in Mumbai at reasonable rates could be good bets even in these turbulent times. With outlook on the market as a whole being bearish, brokers expect realty stocks to slip further.Most property developers in India were riding the wave of an unprecedented demand due to a combination of rising affluence, tax benefits for home owners and low interest rates. But, this fuelled speculative buying in the sector, causing property prices to soar to exorbitant levels.For more view- realtydigest.blogspot.com
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