Are Indian Investors Looking Beyond All Stock Portfolios?

Having made money in the five-year rally in Indian stocks, retail investors are now slowly turning to other asset classes and markets to boost returns, mutual fund officials said. A 21 percent drop in the benchmark index this year, that wiped out more than a fifth of the net values of local equity funds, is also making investors view diversification more seriously and invest in mixed asset and bond funds, they said. Balanced funds, investing about 35 percent of assets in bonds and the rest in stocks, mobilised 19.44 billion rupees in January — highest monthly inflow in nearly seven years — while bond or income fund assets doubled, data from fund tracker ICRA showed.  Further Post here

Asian Metals Market Update for 10th March, 2008

Carlyle Group’s mortgage-bond fund was suspended in Amsterdam trading after creditors forced the sale of some holdings, jeopardizing shareholders’ capital.  Thornburg Mortgage Inc., the home lender that’s lost 95 percent of its market value in the past year, may go out of business because the provider of “jumbo” loans can’t meet $610 million of margin calls. As long as such news continue to pour in stock markets will continue to fall globally. US equity markets fell even on news that Fed will pump in $200 billion to increase liquidity squeezes and prevent equity markets from a fall. The Fed thinks that cutting interest rates and increasing endless money supply can prevent stock markets from falling. If the fundamentals are shaky the monetary stimulus package will be useless.

This is an instant world and central banks and investors expect instant results. If the root of the problem is not corrected, instant medicines will have a temporary effect but will occur off and on and can also become an un-curable disease in the long term.  This is what the Fed is doing by increasing money supply and remaining unconcerned over the US dollar’s sharp decline. Short term gains will be long term pain not just for the Fed but for the global economy. Gold and only gold will benefit out of such actions of the Fed.

This is an election year in the US. The measures taken by the Fed will give temporarily relief to the US economy over the coming months. The monetary measures taken by the Fed may have a political motive as the positive result of the current spate of interest rate cuts and huge liquidity injections will be evident after August this year. Base metals will continue to remain volatile this week while precious metals will be a technical trade.

COPPER — MAY FUTURE — INTRA DAY PIVOT: $404.0

Failure of copper to break $302-$304 this week will result in a fall to $372 and $360.

NYMEX CRUDE OIL — FUTURE — INTRA DAY PIVOT: $106.0

Crude oil has to hold $106 else a fall to $100 and $98. Resistance at $106.70 and $109.20

Darling To Introduce 25-Year Fixed Mortgages

British Home owners will be able to take out mortgages at interest rates fixed for as long as 25 years under Budget plans to restore stability to a housing market plunged into crisis by the recent global credit crunch.

Alistair Darling, the Chancellor of the Exchequer, is due to unveil his first Budget. The Chancellor wants to end the ‘boom-and-bust’ nature of the housing market. The most reliable customers will also get access to “gold standard” loans at much cheaper rates than poorer, high-risk borrowers. In a tacit admission that Labour has overseen a high-risk boom in house prices, Alistair Darling, the Chancellor, will encourage mortgage lenders and consumers to use long-term loans to make the UK market less volatile. From this week, mortgage lenders will be able to use new rules to offer more long-term fixed-rate mortgage deals, with interest rates set to be fixed for as long as 25 years.

Ministers are concerned that the “boom-and-bust” nature of British house prices risks wider economic stability and makes many households vulnerable to even relatively small fluctuations in interest rates. Further post read here