Do Not Panic

Do not panic... I know you were eagerly waiting for my comments yesterday but I was occupied somewhere else and could not push my comments even late night. After the Lehman mayhem US financial markets went for tail spin. This will have some effects on some Indian banks which are globalize. Yet I feel it will not have much impact on the Indian co’s by and large and the impact on the Indian economy could be minimal as we are still hugely protected one. RBI swung into action as rupee dropped beyond 46 which is generally a benchmark for GOI. With rupee coming back to 46 and stabling there for a while the inflow will start. Market will consolidate in 3 to 4days time and Lehman will become history and the routine market will start once again. With Lehman, DSP and AIG shocks there could hardly any shocks for at least for Indian markets as there are very few US FII’s are left now. There are chances that the shaken US markets will pave way for Jap and Gulf funds to enter in India. The only issue is to be seen how badly Govt confidence is shaken…? If Govt persist with reforms the flow will come back. Fundamentally we are now becoming more and more solid candidate for inflow. The opinions still may differ on valuations because those who wants to invest may try to see that they still get is cheaper. But India is finally getting a new force of domestic funds stabilizing Indian markets. OIL and commodity bubble have burst when they reached their unbearable levels. Short selling bubble which is the most contrarian bubble of the decade or rather history is set to be burst very shortly. This bubble will be the strongest generators of never dreamed boom in the global economy in coming years because this is the only kind of bubble which goes without any asset class valuations and it gets deeper and deeper with assets values going below their intrinsic values. In short this kind of bubble could take oil to even 50 usd also. No wind favors he who has no destined port