A Holi wish: Market turnaround round the corner

We Indians do or rather overdo everything in style. When our cricket team suffers a loss in a series we burn the houses of our cricket stars, and when they win we catapult them to the status of demi gods. The same is true for stock markets. When the market was trading at plus 20000 levels (BSE Sensex), everybody was convinced that the market was heading towards 25000 levels. Today when the market has been trading at 15000 levels, there is a talk of market going to sub 10000 levels. This sudden change of sentiment is uncalled for. But thats the way we are - 'Ham to aise hain bhaiyya'.

Over the past couple of days, I have been seeing a lot of negative vibes coming from the retail investors:
Somebody has already booked huge loosses. Those who are still sitting on profits are worried about the notional loss in their portfolio. Some even go to the extent of saying that they will never return to the stock market. The pain of loss is driving them to the other extreme - their is a clear sense of fear in everybody's mind. Our media is also responsible for spreading the negative vibes among investors, by operplaying the negative news.

So on the occassion of Holi, I have decided to put my 'Positive thinking Cap' on and do some Pep talk to lift the spirits of Investors. and this is what I visualise for the future:

Dateline: XX March 2008.

" Markets rebound from the days low of 14100 on the sensex, for the highest daily gain on the sensex"
The mood will change for the better after this headline. Then there is a spate of good news from the globe, to lift the spirits of the market participants. (It is buying time on markets!)

• Fed rate cut boosts the sentiment
• Liquidity crisis comes to an end
• MSCI index revamp: India gets a lions share
• Crude Oil softens: trades at $90 per barrrel
• US $ finds its feet: worst is over for Financial markets.
• FII's turn huge net buyers on Indian bourses
• India reports strong IIP numbers for February 08: growth at 8.5%
• Moody's upgrades India's rating
• Inflation falls below the 5% mark
• Agricultural output exceeds expectations.
• RbI relents on hawkish stance: pumps liquidity, CRR reduced.
• Govt to last full term; left renews support

All the above news flow is responsible for the change in sentiment. There is a change in market perception within 4-6 weeks.

Dateline: XX May 2008.

" BSE Sensex crosses 18500 level: Bull run is on". (It is time to book partial profits!).

This is a colourful Holi wish, painted with the vibrant colours of a growing Indian Economy. I firmly believe it can happen. But I will keep my fingers crossed. Wishing all of you a 'Colourful Holi'.