Archive for February, 2009
Downward bias
February 6th, 2009
The mood in the markets is far from assuring. I must admit that I underestimated the pain that our economy is suffering from. The news flow continues to have a negative bias and the issue of pledged shares has become a bogey it seems. Now that Sebi has mandated corporates to disclose the pledged shares so that all category of investors have this price sensitive information, a lot of skeletons are coming out of the cupboard.
The important thing to note is that large caps continue to languish. The problem is that investor sentiment has been so badly mauled that valuations are no longer the issue. People are worried that there is more headroom (downward) for prices of large caps. Scrips like Reliance, Larsen, Tata Steel can actually go down by another 20-30 per cent from current levels, only because bears are gaining an upperhand. More on this later.
