Volatile Stock Markets due to extreme uncertainty

I am closely monitoring Indian stock market volatile movements but not giving any guidance due to extreme uncertainty. I have not seen this range of uncertainty for the last 3-4 years. That’s why I am not posting in the last 4-5 sessions. I will watch for another 3-4 sessions from side lines to get clear picture on Indian share markets.

Global Economic crisis (Sub prime credit crisis):

Don’t be tempted by short Bull Run in US stock markets. This subprime crisis is the most severe one in the last 16 years. We are just watching the tip of ice berg. We will see real effects in the coming weeks/months. No one is giving clear guidance on the magnitude of this subprime crisis. Rate cut by fed reserve may not be sufficient to cool down this crisis. Dow will touch 11,500-12,000 in the coming months.

Local Political crisis:

Communist parties are doing their best to dampen the spirits of bulls. Before this political uncertainty, India is the last option for withdrawal of money by FIIs due to the strong fundamentals. But India is now the first choice for FIIs to withdraw money in case of crisis due to political uncertainty. Uncertainty is always more dangerous than real thing. Communists may not withdraw support to UPA Government but they will cause enough damage to the investors by their comments.

Indian Stock Market guide:

1. Sit on cash and invest money whenever BSE Sensex falls below 14,000.

2. Invest money in high growth stocks like Punj Lloyd, Crompton Greeves, Bharti Airtel, BHEL, L&T, PFC, SBI, Welspun Gujarat, Praj Industries etc. They will lead the next rally.

3. Foreign investors will invest in these stocks after the termination of credit concerns.

4. Don’t expect exceptionable returns in 2007. Invest up to 2009-10 in growth stocks for exceptional returns.

5. Banking and Finance, Capital Goods, Shipping, Power and Infrastructure stocks will lead future rallies. Telecom story will continue for some more time.

6. Speculators will rarely beat long term investors in the returns/earnings in Stock markets.

7. Pharma is the dark horse.

Starcom-Mediavest survey on Online Trading platforms in India:

1. Reliance Money is the most secured and cost effective platform while Motilal Oswal is the best research driven platform. ICICI Direct is the least cost effective platform.

2. 5 Paisa is the second best cost effective trading platform while ICICI Direct is the second best secured platform.

Please share your experience on online trading platforms in India.