Shock wave

In last one month stock markets have moved up significantly and all of you who read my blog regularly are asking the same question WHATS GOING ON??? 

I was also shocked for some time with this movement but very soon I recovered from it as I realised that its peculiar of markets to surprise you every now and then.

So what has really changed in last one month? I decided to take a walk....I met heads of some top banks in my region. Following are the key points from these discussions:

Lending is either down or almost NIL in some sectors. 

Term loans are no more a fashion statement for banks. 

WC facilities are offered but here again the AUTO sector is a big NO. 

And on top of this they all agreed that they are expecting the numbers down by at least 20% in some major sectors and it could be even worst in sectors like Real(?) estate. 

Before I conclude anything on this, let me draw your attention to the fact that in 2009 we almost had ZERO ipos hitting the market. Buy-back offers are in fact doing the rounds in the market.

To sum up, either there is no money in the system (LOANS OR IPO) or when there is money its not put to the best use (as companies are using it for BUYBACK). Thus the perception in banks, companies or market in general is not so positive.

So everyone is shocked by this move. I am sure that there are many who lost the money in this uptrend and very few must have made some money. So for me i am ready to bet that with result season just round the corner and elections not so far, at least in India, we should have a major correction from the current level.

I firmly believe that its ECONOMY that drives the market and not the other way round. Therefore i regret to say that if you are seeing the markets in Driver's seat, it time you apply the emergency breaks.

For more: esiddharth.blogspot.com

(PS please consult your advisor for financial decisions. )