Black days will continue for Global stock markets

Global markets are continuing their correction due to credit crisis concerns. US and Asian markets are falling with 2-6% correction in the last 2 days. Indian share markets will trade according to global trends for some more time due to FII selling. No one is giving exact guidance over the severity of this crisis. Subprime crisis added fuel to the already overvalued global markets. Watch from sidelines how this crisis will influence world markets and learn lessons for future investments.

Global Stock markets:

Courtesy: Bloomberg.

Global markets fell on second consecutive day. Dow Jones lost 167 points after the volatility in the initial trading session. Asian Stocks are near their 3-month low and Indian markets will follow their global peers. Uncertainty over the magnitude of subprime crisis is the major factor behind this melt down. Will more pain is on the cards? Wait for some more time.

Market Movements:

1. BSE Sensex: Sensex may lose 400-500 points in the initial session.
CMP: 15016.
Target: 14850 and lower.

2. NSE Nifty: Nifty may lose 150-200 points in the initial session.
CMP: 4375.
Target: 4310 and lower.

Positive Stock Market News:

1. DLF will buy DCM Shriram land for 1,600 crore.
2. Punj Lloyd sold 11% stake to private investors for 814 crore.
3. Bharti Airtel will launch 2G and 3G services in Sri Lanka.
4. Demerger of ICI India is on the cards due to acquisition of ICI by Akzo.
5. 2009 is the year of consolidation in banking sector.
6. Vedanta sold Sterlite gold for 320 crore.
7. Idea Cellular is the front runner for ICC sponsorship.
8. Bharti Airtel hiked local call rates along with SMS charges.

Negative Stock Market News:

1. Clear slowdown in consumer spending in US due to credit concerns – Wal-Mart.
2. Govt. Allowed cement imports to curb rising cement prices.
3. Expansion plans of India Inc will slow down – Morgan Stanley.
4. Government may move court on Reliance Gas price – Hindustan Times.
5. United Spirits debt rose due to W&M buy.
6. Tata Steel’s Titanium project is in trouble due to land acquisition problems.
7. Global markets will correct by 30-40% - Mark Faber.

Stock Market Analysis:

1. IPTV is set to boom. IOL Broadband is the biggest beneficiary.
2. Foreign Investors are real culprits behind this abnormal rise and fall of Indian Stocks.
3. According to my view, BSE Sensex will touch 14,000 mark in August and Share markets will bounce back after this subprime market crisis is over.
4. Enter into growth stocks like Punj Lloyd, Moser Baer, Bharti Airtel, Reliance Companies, L&T, BHEL, and ABB after the correction. Believe in the long term growth story of India.
5. Short term investors may suffer heavy losses in the coming days. Don’t take highly leveraged positions in these volatile times.
6. Mic Electronics is the best stock for long term investors.
7. Don’t do bottom fishing in sugar sector. More pain will come in the coming quarters.
8. Bharat Forge, Bajaj Hindustan, Tata Motors, Mastek, Tata Tea, TCS, Cipla are some contra buys for long term investors with 18-24 month horizon.
9. Sanjay Dutt arrest may spell doom for some distribution companies in the short term.
10. Fortis Healthcare is my favourite stock for long term investment. I have holding in this stock.
11. Takeover targets like Spice Tele, Spicejet may bring value to investors in the coming quarters.
12. Tata Tele and Essar Oil are my favourite turn around stories. I am also betting big on Ispat for long term.
13. Conservative investors should stay away from share markets for some more time.

Best Stocks for Day Traders:

1. DCM Shriram Consolidated.
CMP: 87.
Target: 90.

2. 90% of Index stocks will fall due to global melt down. Risk takers may bet on IT stocks to recover if rupee depreciates against dollar.

Stocks in NSE F&O ban: Nagarjuna Fertilisers and Omaxe.