Market Outlook !!!

Market shorter to medium term Outlook:

The $500 billion, 20-day loan, handed out to banks by European Central Bank has eased short term lending rates in the EU and helped the banks breath easy over the year-end. The amount is twice that the ECB thought the market would need and this dwarfs the $ 20 billion auction by the US Fed earlier. I believe this is a painkiller that has been administered to a tight economy and is not a remedy that will eliminate the root cause of the malady.So while short term looks assured, the crunch will come back to haunt the markets in the New Year.The markets were closed on Friday and then would open for a day on Monday next week to close on Tuesday for Christmas. Logically thinking, punters would not like to trade much in these sort of environment.Lighten up your positions from volatile scrips.


Market longer term Outlook:

The Sensex, at current levels, trades at around 19 times its expected 09 earnings which appears decent from an investment point of view. This takes into account expectations that the top companies will grow bottomlines by over 20% in FY09.However, the fact that most of the results declared so far have been in-line or above expectations, have provided the bulls with another reason to continue to pump in money into Indian equities. The results out-performance from major companies from sectors such as real estate,infrastructure has led to continuing euphoria on the street.I would, however, advise investors to remain cautious, as stocks have discounted valuations of the next 4 to 6 quarters which makes it a rather risky proposition to invest at the current juncture, as any financial disappointments by India Inc could have serious negative repercussions on investors' portfolios.
Happy and safe investing!