Today, we expect another weak opening. While the US shares crashed overnight and Asian markets are mixed, with only the Nikkei down significantly. Depending on global cues some recovery could set in later. Seven-year low inflation rate of 3.03% for the week ended Feb 21 seems to be a non-event.
Life is getting tougher for corporates and consumers alike. And, though governments and central banks are doing their best to reverse the slide, the markets are not particularly enthused. Chances are that things may get even worse before there is any meaningful recovery. Brace up for a long period of pain in terms of economic contraction, sagging consumption and dwindling investments.
We are in the midst of a perfect storm and there aren’t many places to hide. The global recession is getting worse by the day. FIIs continue to dump Indian shares and a weak rupee too is a cause for concern as is the precarious government finances. Some say the flight of safety is taking its toll on our market. But where is the safety we wonder!
If you are a long-term investor, stepping in at this point could be a good move. One should buy on the way down, rather than on the way back up. And, it is near-impossible to know exactly when the bottom is going to be hit. If you have the stomach and the money, then investing at these levels and holding out through the period of bounce back will translate into decent gains.
