Friends,
Nifty movement , for that matter entire equity universe, is keeping people on tenterhooks. We have to take reference to macro environment to have some solid idea as to what is in store in respect of the Nifty as well as rest of the Indian equity universe for the common investors. One surprising thing is that any and every adverse development in USA is having its impact on Indian markets while the positive developments there have not been having similar impact. This is surprising for the economic health may have become worse for USA , it is not that bad for India. A time has to come when Indian markets get a boost and the USA’s go down for the secular trend is that the BRIC nations are increasingly having a greater pie of the world’s GDP.
Nifty suffered further losses today and closed at 4500 level. Let us have a look at the macro statistics and evalueate Nifty against each of the important macro numbers.
IIP (Index of Industrial production) growth touched 2% in Apr-June 2001, coming down from 8% in Jan-Mar 2000. It steadily climbed to 10% in July-Sept 2005. It sharply came down to 7% in Oct-Dec 2005 only to peak at 14% in Apr-Jun 2007. Since then it settled at 6% in Jan-Mar 2008 when Nifty ruled at around 4600. In Oct-Dec 2005 it ranged between 2400 to 2800. Noticeable is that the IIP growth never went down below 6% for last 7 years. Now the question is why should it suffer any further when the IIP growth would only be higher in coming times. If any losses have to be justified , the IIP should decisively breach the 6% growth rate of IIP . This apart, there should be no seeming possibility of its recovery in foreseeable future for the markets to remain bad.
This is just a point for you to ponder over. Next point will be taken up tommorrow.
HariOm,
krsnaKhandelwal
