Dear Raj,
If the returning of the borrowed stocks could be the reason for the flare up in stocks, it is not a bearish news, it is a bullish news. If there were no stocks to borrow, this much of selling would not have happened. This indicates that our markets are oversold, much more than any other international markets.
If credit crunch has caused the main sell off internationally, oil heating up to flash point was just another catalyst. Inflation world over has shot up, not to blame our own govt. Just a joke, how we can control inflation by being a bit disciplined on Oil front:-
Supposing all vehicle owners world over decides that we will just fill as much Petrol/Diesel/Gas in their vehicles as is required for a trip, instead of filling the tanks enough for a week:- Petrol Bunks will have surplus stock when the Refill Trucks come and will not be able to take any extra stock. Reservoirs/Refineries will not be able to take the surplus stocks piled up. Finally, they will have to reduce the price instead of reducing production. This is just a joke, not at all practical. But there is an inherent lesson to learn. No discipline in our day-to-day actions is causing such spiralling inflation which can be controlled either by regulations or by self-disciplining. Stocks are no different. When sensex was above 18K, if we stopped buying, probably this fall would not have been below 16K level. Similarly, if this time fall were limited to above 14K, next flare up need not have been expected.....you get me what I mean? We are on the upswing, if and only if, UPA survives....but, Monday is too indecisive...I won't dare to say how it will end up, but the game will go on and a severe swing on both sides can be expected.
Cheers! Tom |
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