Steroids are wonder drugs meant to pull things up with recipients. Putting steroids to work is often an easy option before physicians who see a need to pull someone up quickly from a difficult situation. But, the recipients should be ready to take the impact of steroids. Putting an economy on steroids has been the favourite choice of central bankers and finance ministers the world over. The real impact of steroids will be known after you take the economy off steroids. This is the season for economies to go off steroids. We should know their real state of health soon enough. The US is withdrawing QE. Emerging economies need to reduce deficits. India will need to shrink fiscal deficits after elections. In the near term, what happens in global economies should be closely watched. We could have a few surprises in store. The global economy may not be as healthy as we think it is.
Iwiz: Volatility doesn’t change the Value of stocks. It only moves prices.
The dealers in brokerages are a strong barometer of the stock market mood. Talking to them gives one a sense of the state of the market. The mood clearly is glum. And, that is an understatement. It has been years since the dealers saw an increment. Annual bonus is simply out of question. Jobs are on the line every single day as dealers struggle to meet brokerage targets with very limited client participation. If one loses his job, it is impossible to get another. Clients who give business also demand reduction in brokerage rates which are in any case at a two decade low. As the big boys of stockbroking close branches across the country and shrink their presence, there is overall gloom in the stockbroking industry. The Sensex or Nifty that have been propped by a few stocks hardly reflects the state of the market. Catch a visit to your neighbourhood stockbroker’s office. When was the last time you did that?
Istrat: Markets could move into a buy zone. Be ready.