There was squawk on the Dalal Street. The Nifty ended at 4919, below its 200 DMA.
We saw a global selloff today, with Asian indices tanking abt 1%. More pain was witnessed in the European Markets which plummeted about 2% after Greece banned naked short selling in Euro bonds and some 10 European banks.
However I see this as just a sentimental reaction and Indian markets should rise again from the current levels.
I think markets are overdoing the Greece crisis because India is least affected by it. Infact countries like Poland, Chez and Hungary are most affected as they carry a lot of trade with the EU nations.
Infact in this era of shrinking economies, overgrown debt burdens, fiscal imprudence and increasing unemployment of the biggies like the US, UK and Europe, India stands to gain the most. With near term concerns over China monetary tightening and Japans decade long deflation what seems to be shining brightest is India.
With consumption driven economy growing at 8%, inflation coming under control, coupled with stable government, strong & sound banking sector and credit growth picking up India is at the center stage of the world.
I think it is only in the short term that the FIIs are pulling their out their money as they are nervous and want to book their profits and emerging markets are the ones where they have made most of the profits. I think any further dips should be used to buy in the Indian markets as fundamentals are strong and valuations now getting cheap.
I place my bets on IRB (an infra play) and Reliance.
I also feel one should buy in Sesa Goa and Gujrat NRE Coke at every dip. Commodities have been overly bashed and you will see a overturn. With Chinese economy growing at 10% and inflation at 3% is not much a worry. China has already taken a few steps to tighten its monetary policy and so I dont see much concerns over Chinese economy as well.
Another lucrative long term buy is Cairn. Crude has temporary fallen to levels of 68 and it will bounce back any time.
Lets just hope that this time Monsoon does not play a spoil sport and we have adequate rainfall so that our economy can sustain growth of 8% and above.
