Global weakness collaborated with Budget negatives resulted in today’s market drop losing over 900 points. I think near term, there was lingering spillover of poor sentiment from STT changes and capital gains tax. There was lot of confusion on the debt wavier and how that would be treated between the Government and the banking system spoiled the mood of the day for investors. This happened for second time in 2008. Here I felt heat becoz none of my day traders are willing to enter into the stock markets today. Even at the time of writing now, I am looking at my television screen, Dow Jones is hanging down -32 points which could result in in tomorrow’s opening market would be very weak. I see experts telling that markets are being over valued with which somebody mentioning that markets needs to be tested at 15k. WOW!!
So if you ask me for a ratio of what might have done the markets in, I would say over 75% global markets around 25% Budget. Yes, Asia markets were down today but the drops there were more like 2-2.5-3% and we closed 5.5% down. At no point during the day, did the market conclusively moved back after the morning hit above their 200 daily moving average and just kept grinding down. Moreover volumes were not that big but nobody wants to buy right now. Everybody believes that the market’s going back to retest the January lows, so I think sentiment is too fragile now.
There is no institutional support. It is strange that who are sitting on cash are not buying even at these levels and we saw from the third eye, that there was some institutional selling from a couple of large FIIs today. So lack of buying movement, may be a bit of shorting and primarily the global issues pegged back sentiment today.
Posted by krishna Raj 