Ratings are now injurious to
market. The last thing one wanted after a bad week was another weak start to
the new week. S&P has stripped USA of its famed “AAA”
rating, citing its ballooning debt and less-than-expected budget cuts. The move
came after markets on Friday.
Not surprisingly, things are
looking glum this morning. A fresh round of blood-letting has begun in Asia and other assets. There is panic across world
markets. US
stock futures have tanked. The dollar is under pressure. Crude is down while
gold is up. Risk trade is likely to take another knock.
The start in India will be in sync with the
global markets. The proceedings later in the day will hinge on how the offshore
markets behave. A few Asian markets have already recovered from day’s
lows.
As far as India is concerned, any material
drop in commodity prices (especially oil) will be a positive. Fund flows might
also turn to a relatively stable economy like India amid ongoing problems in the
developed world. So, take a medium-to long-term view and approach the market
accordingly. Get your shopping list out but don’t buy on credit.
