Global calamity...

Govt of all major countries acted yesterday. Even RBI acted fast to cut CRR rate by 1%. IIP nos were too bad. This all reflected in huge sell off irrespective of the fact the Govt directed insurance cos to step out for buying. ICICI Bank was again grappled with burst story which got hammered by 20%. The real sell off is coming from all funding trades where the big ones who had leveraged positions have left with no option than to sell it at the market rate. Going by rates of few co’s we have already sinked below Sensex 5000. This global turmoil is bigger than the 1929 turmoil and major global players will have to find the answer very shortly. There is huge run on ICICI Bank everywhere in the country to withdraw cash from the bank though ICICI heads are time and again clarifying that there is no trouble with them. It is also not clear whether there is a foreign hand in doing all this in order to see an opportunity to grab India’s No 2 private bank. Only time will give us answer. The IIP nos is not reliable as seen in the past. It drops to 2% then again rise to 7% which means the working is grossly incorrect. If the IIP is truly at 1% then the GDP ought to have fallen down below 5% and the tax collections should have been negative. It means even after slowdown the figure of 1% IIP can’t be realistic. The market condition is so bad that nobody is able to see OIL at 82 USD and inflation at 11.8% only because the current problem of liquidity has assumed greater place. Market is tossed for now and the selling will get more aggravated with every rebound for at least 6 to 12 months though for India the fundamentals are in tact. In fact, few foreign experts have said that the inflow will soon start to India from the Swiss Bank which is more than sufficient to take care of Indian liquidity as well as Rupee. The valuations back in India are dented only due to squaring off position trades funded by debt and redemption pressure. The later in case of A gr shares and former in mid caps controlled by operators. There is no reason that B Dyeing should come to Rs 200. Core projects were battered 49% today to see trades at that level. Similarly 8 realty cos were banned for funding which include HCC, ,Unitech, DLF etc. It is just impossible to believe that this is end of the world. Only those are able to see through this 80 year one off unprecedented crisis will be able to see their rise again once the tsunami effect is over. No of stocks are available at PE ratio 1 or even below and yet being hammered only in order to meet the payment obligation to the brokers or the funder. One segment of the market has come forward fro buying value shares which had sold shares in 2006/7 at 10000 to 12000 levels finding the valuations below their sell prices.