i Develop Stocks Advisory

ADAG back... ADAG is back with a big bang. It was ADAG’s day out, all ADAG stocks were on fire and kept the market buoyant. The inflation numbers were bad and few statements from the FM and PM suggested that it would take some time before the effects of the measures come through thereby keeping the inflation in check. It always happens that the effect of measures takes time to come. One would think as to why the markets are behaving in opposite manner i.e with higher inflation how our GDP growth can be justifiable. The answer is simple the open interest in Eurodollar trades are diminishing which suggests that the dollar might appreciate. Fed is slated to meet on 30th this month and there are chances that Fed might reduce the rates by 25bps but if they don’t do so i.e if they keep rates untouched than dollar might stop depreciating which will put downwards pressure on commodities. We can already see the effects on gold and oil which have already started their southward march. It is also speculated that the Fed might actually stop cutting rates and the ECB might just reduce the rates as European Union is experiencing slow down. With ECB reducing rates and Fed keeping rate cut on hold dollar is slated for a bigger appreciation which would further curtail oil and gold prices which in turn would stop the prices of wheat, rice, etc and controlling inflation globally. Small investors may pick Asian Oil, RDB, Stelco, India Foil, SS Duncan, Bihar Tubes, Martin Burn, HEG, IDBI, IFCI, Punj, HDIL or any other stock where they see more value and wait for the tide to turn in their favour. "The best things and best people rise out of their separateness; one should be against a homogenized society because every one wants the cream to rise."