April 15, 2014

Election Buzz in Sensex and Nifty


Courtesy – Business Today

Last week, I met one of my friends who asked me an interesting question, “WHere is this Nifty and Sensex heading to?. If Modi comes to power will Sensex hit 25000?”

So here is my view on the current Market rally. It looks fake and phony. Things not adding up. Nifty could correct sharply in coming weeks (post elections)Even If Modi comes into power or not, Market’s are going to have a tough time ahead

There are a number of things which are making me suspect something fishy in this current rally.

Even IDFC rallied from 80 to 142 in hope of Bank License. But the minute it got Bank License, IDFC showed a rate of +10% in pre market and ended that day -2% in Red. IDFC has since fallen 14% from 142 highs to 123 levels now.2. There is a lot of inflow of FII funds in the last 2 months.yet Rupee is not appreciated. It’s still trading above 60. There is a high chance of Rupee trading once again between 65 68 ranges. This is actually a trap made by the FII’s for the retail investors.

Until February there was a huge problem for the market’s. But suddenly all have forgotten this and a buzz has been created about the election and the MODI as PM. But seriously friends, Nothing is going to change in reality.

Small Investors should also see that most of the stocks like HDFC, Infosys etc have reached the FII upper limits and have stopped rally now.  FII’s will suddenly pull the funds, so stocks like this will be stuck at higher rates in the hands of small investors.

If the US Immigration bill is passed. Then IT stocks will be hammered and you can just imagine what will happen to Nifty if Infosys crashes. FII’s are buying the shares so that they get good volume when Retail Investors keep buying and one fining morning they will start SELLING OFF.

I strongly feel this as a trap set by the FII’s. You will definitely get a better chance to invest post elections, until then let’s wait and see.

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