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NIFTY 50 IN LAST 20 TEAR: ONE OF THE GREATEST WEALTH CREATER

Equity is the one of the most exotic asset class, it has given about 21% average annualized return since 1990, investment in equity has seen sea change in recent decade. Emergence of business channel sprayed the awareness about equity among the investor community ,earlier to buy equity was not so easy as it is now, today market is in pockets of investor in terms of access, technology has provided the multiple way to access the market through internet, through cell phone and WAP , now a day’s various expert advices trading and investment tips are available with the investors, Many fund house are running their mutual fund and giving good return to their investors and the asset under management of mutual fund industry is approximately $ 6.7 lakh billion. Reliance capital is the largest mutual fund whose asset under management is more than one lacks crore followed by HDFC MF, ICICI Prudential MF, state run UTI Mutual Fund whose asset under management is 68,000 crore and Birla Sun Life MF are the five largest fund house of the country. Insurance companies, HNI, FII, Retail investors are holding significant amount of equities in their portfolio, although the allocation in equity is less than 5% of the total house hold saving in the country however in totality it is a huge amount. In recent market selloff where FII has sold 13.1billion US$ at one way and DII has bought more than 16.2 US$ at the same time in other way.

Identification of investable share is the tuff job even for the market participant and timing the market is even tougher for the expert, but the fundamental analysis and technical analysis helps the people to identify the cheap stocks at the right time to park their investments. But still the question remain same what and how much one should buy? The main barometer which is index it gives the diversity and credibility of the basket and also liquid to exit and enter at desired time for the investor

NIFTY 50 stocks reflects the appropriate behavior of equity because this is the broader index composed of 50 blue chips Company of various sector having better corporate governance, credibility and profitability. Nifty is claimed as the stocks of the nation gives the diversity and reliability .Reshuffling in script is also an important phenomena because we have observed that time to time the company who hasn’t followed the corporate governance and not adequately performed have shown exit way from the index, similar incident happened with the Satyam computers after the scam broke out in the company the script of the company removed from the index and replaced by other company. The most important characteristics of NIFTY is the diversity it is the basket of the shares who represents the various sectors like Reliance and ONGC represents the petrochemical sector, NTPC represents the power sector, ACC represents the cement sector ,Infosys represent the IT sector and SBI and ICICI bank represents the banking sectors and so on.

The stocks in NIFTY gets proportionate weight age according to their market capitalization so if money will allocated to the company who are the component of index according to their proportion, then the capital appreciation will be similar as the index fluctuation.

YEAR	OPEN*	CLOSE	GAIN PT.	%
1990*	279	372	93	33.33333
1991	318	558	240	75.4717
1992	737	761	24	3.256445
1993	744	1042	298	40.05376
1994	1083	1182	99	9.141274
1995	1182	908	-274	-23.181
1996	908	899	-9	-0.99119
1997	939	1079	140	14.90948
1998	1081	884	-197	-18.2239
1999	890	1480	590	66.29213
2000	1592	1263	-329	-20.6658
2001	1254	1059	-195	-15.5502
2002	1055	1093	38	3.601896
2003	1100	1879	779	70.81818
2004	1912	2080	168	8.786611
2005	2115	2836	721	34.08983
2006	2835	3966	1131	39.89418
2007	4137	6130	1993	48.17501
2008	6144	2959	-3185	-51.8392
2009*	3033	4300	1267	41.77382
TOIAL	279	4300	4021	1441.219
HIGH	279	6200	5921	2122.222
LOW	279	2242	1963	703.5842

Table1: Analysis of equity data since 1990

Above table depicts the twenty year equity behavior in Indian context the index was quoting at 279 at July 1990 and when it peaked out in January 2008 it was quoting on whooping above 6200 which was 2122.22 % from the 1990 level .The appreciation is excluding the dividend payouts from the holding of the share for such a long time. The gain has outperformed all the asset class around.

However market corrected in between, time to time but they recovered their losses in coming year. In the above calendar 1991 was the best month in terms of return the year has given 75.47% of annualized return to the Nifty followed by 70% in 2004 and 60% in 1999.since 1991, 14 years has given positive return while 6 years has given negative return among them 2008 has given -51% followed by -23.18% in 1995.

Fig: graphical presentation of nifty movement on monthly closing basis

*data for year (1990 July onwards, 2009 up to June first week)

** Nifty touched 4600 at 5^th June 2009 at the intraday basis.

Several events have been priced by the market since 1990. earlier Indian capital market was in nascent stage and the market infrastructure were poor, it was operating under very low base and volume, there was the manual trading system in practice, settlements were in physical form and time taking activity, the unlawful practices were quite common with the Indian market. After the new economic policy opted by Rao Manmohan duo the market has seen a revolutionary change in their all dynamics. The participation of investors has increased after the reform, system became more regulated after the formation of SEBI, FII became the dominant player in the market, retail and HNI also became active in on the bourses, household saving started trickling in the equity market through mutual fund and direct investment. These events bring new confidence and improved the sentiments in Indian capital market.

In Indian condition equity sparked fear in the minds of investor. In India people in generally love to see their investment on regular basis. The fluctuation in the market is mostly hyped by the media channel that’s why people feel themselves scary about to investment in the market. In spite of that the equity has given best return in the longer horizon most of the household saving finds their way towards fixed income instruments because liquidity concerns and conservative attitude of the people. Investment psychology plays very important role to park the saving in the equity, and second most important thing is risk aversion or risk apatite.

The advent of business channel has created a revolution in the investment world people getting aware about the fundamental and technical’s of the markets and behaving accordingly.

The financial reforms taken by the government open another gate for money to the capital market and treasury operation if corporate emergence of HNI and retail investor in the big way played significant role in the lustrous performance of capital market in India.

Today Indian market has their own legs and wings although they are more dependent on foreign flow but as the time is running out the dependency is getting lesser .In the recent downturn in equity market in 2008 the FII has sold more than 13billion US$ and in the same period more than 16 billion US$ of domestic money get the way in the market .Indian equity market has slowly and slowly showing sense of stability in their behavior.

1990:

At the first trading day of July NIFTY was quoting at 279 and by December end it climbed 75 points which was 25.25% up from July level. It was a politically unstable period the unstable economic policy by the previous government of Janta Dal and latter on Samajwadi party headed by Chandrasekhar previously India was under tremendous pressure of Balance of Payment crisis this was the period when previous government kept their gold reserve to IMF to get foreign exchange for their short term requirements in 1989.

This was the phase when market was poorly regulated only few people were able to invest in the market because of the technical constrains. Manipulation frauds were the flavor of the market in that period.

1991:

Year 1991 was the greatest year in the terms of equity market return it was fueled by the economic reform and liberal policy opted by the Rao government in the centre .Market was seen greater participation from the investor and DII .and given whooping gain of more than 75%in a year the first half was given 22% return while last half given 41%of return.

The market has seen new ray of hope in the form of reform and performed accordingly this was the pivotal period for the equity market in the India from here the market never looked back.

1992:

Market started with optimism in first quarter and given the return of 120%, however in later month market cooled off and closed its shutter for the year at 33% of gain but this gain was very important because it came after great 75% run in 1991.this was the tome when FII activity started strengthening in the country. Political stability and optimism of growth was priced by the market that’s why market showed follow rally after record year.

Indian economy reflected the ray of hope in this period and this was engineered by the Rao –Manmohan policy

1993:

Year 1993 was also started on good notes. Historical serial bomblast of 12^th march 1993 shocked the market and on reaction of it market corrected 19%in two month i.e. March and April. The green year for the market here it has given 40% annual return, it was great time for Indian economy because Manmohan singh policy was converted into the performance by that time and the country and the corporate India was in growth track .There was some profit booking seen in the first two quarter but Nifty came back strongly in next quarter with significance gain.

1994:

1994 was the year of consolidation after three great years of Bull Run for the market. Main outcome of the year was the market able to hold their green flag with 9%gain in the year .in spite of global problems and geopolitical concerns market consolidated their gains in this year.

1995:

After the four year of Bull Run market corrected in this year due to political uncertainty in Delhi and poor monsoon given the market an excuse for profit taking and it corrected 23% in the year. This was the real breather for the market after for year of strong Bull Run.

1996:

Year started with the cautious note and remained under narrow range in whole year market closed mere 0.99% down although first half market gone up 23% while final half of the year surrendered 18%of their gain which was backed by non event year.

1997:

This year was given return of 14% but alternate band of buying and selling were seen on the screen ,FII flow were sustained followed by better global picture .Positive budget and growth familiar budget supported the market gain

1998:

Looming global instability and credit crisis in Asian economy open the selloff in market. NATO intervention on Yugoslavia Middle East crisis of Israel and Palestine dampened the sentiments of the markets and market corrected 18%in the year.

The subdued interest if FII and cooling of economic activity in the region pull backed the market this year.

1999:

This was the third best year of the Indian capital market with 66%gain in the year the flavor of NDA government led by Atal Bihari Bajpayee was backed by the market participant and plenty of optimism created euphoria in the market.

Political stability in the centre and new reforms by the government bring the positive sentiments in the market

2000:

Gloomy global economy and poor monsoon given the proper reason to selling in equity market .political instability in the Delhi was another reason that created selloff in the equity markets. This year market corrected 20% in the year. Ketan Parikh incident was created panic in the market in November.

2001:

Global jitter especially Asian crises, geopolitical condition in Middle East created global selloff in the equity markets and India corrected 15%in the year with global peers.

Japanese economy and problem in the Japanese financial system spread wave of selling in the equity market in the Asia region.

Domestically poor agriculture growth and bad corporate earning added more flavor in the bad sentiments and market further cooled

2002:

After the subdued year Indian capital market was mixed in 2002 here alternate bouts of rise and fall were registered on the screen. Political uncertainty also added the sentiment and market finally able to registered 3.6% gain in the year and made a good base for further move which was never imagined that Indian capital market going to surprise every analyst in coming year.

2003:

This was the phenomenal year for equity market Nifty given 70% return in year among them 66% came in second half of the year. Again market was celebrating the election year.

Economy was growing at the rate of more than 8% one of the highest among the growing nations. The corporate earnings were phenomenal. So market given thumbs up and registered second highest gain in the history.

First half of the year was given only 3%of return but in second half it was given 66% return.

2004:

Surprise result of Loak Sabha election and strong performance of left parties spread the negative sentiments in the market.

After the sustain rise market corrected in first half in first quarter 7% second quarter17% and third quarter13% however fourth quarter was the recovery backed by the some policy action of P.Chidambaram and Manmohan Singh. The quarter given 17% of northward movement and annual basis market ended positive with 8%gain.

2005:

India became the destination of the overseas money yen carry trade created the opportunity for the Japanese money to trickle in Indian bourses .and this effect was visible with the 34%annual return in the market.

In spite of the fact that left parties supporting the government they forwarded banking reform infrastructure spending and a budget that liked by India INC

2006:

Chidambaram effect was still there on Dalal street .Index were making new high and it was the liquidity driven rally.

Growing economy better corporate number reflected at the screen of the market and market has given 39% return in the year.FII were the key contributor in the market they were parking their money in BRIC country .hedge fund became more active in this year .they were putting their money through the participatory notes. Which were issued by FII?

2007:

Year 2007 was the green carpet for the markets with whooping 48% rally in the market backed by record FII flow of 17 billion US$ in a single calendar year and significant amount of retail participation in the market. The best month was the October with the 16% return while worst month was the February with 9% negative return. The sentiments were quite positive in this year record number of companies came with their IPO and they were successful to tap the market.

By this time India became one of the prime destination of investment, many India dedicated fund were started operating from overseas, tax treaty done with Singapore also supported the equity market, good amount of Japanese money came in the market and market rallied on the liquidity.

The GDP growth was at record level of 9.2 and India were about to achieve the double digit growth.

2008:

The year 2008 was the worst year and one of the most eventful year of the equity market not only in India but globally, the ghost of subprime spread their wing across the globe, credit crisis was the flavor of the season .This event pulled down the equity market globally, equity markets all around the globe corrected more than 60% taking the global link ,Indian market has also corrected record 51% in the year .The investors money significantly eroded in the crash .In the entire calendar year only July and December was the month that has given the positive return and rest of the months ended into the red.

Growing crude price, inflation and credit crisis was the flavor of the season

2009:

The year started on the subdued notes however post march market surprise the investor with their northward journey FII pumped significant money in the market and market gained 41% by June election result created great euphoria in the market and in the history of Indian capital market. Indices had hit the 20% circuit on Monday, May 18, after the UPA (United Progressive Alliance) swept the Lok Sabha polls. This was the repeat of the history .The day's percentage rise was the biggest since a 20.8 percent jump on March 2, 1992 when Singh, who was then finance minister, unveiled reforms that opened the economy to foreigners .This was the pivotal event for the market where same person voted by Indian people to govern in for next five year freely and also saw the government unveiling the list of Cabinet Ministers.

The exile of left party from the decision making process was also celebrated by the market.

Fig: percentage fluctuation of Nifty

Investment of 1000 per year in NIFTY given the return in fillowing way.

Equity		Year*
1000		1st year
2333.333		2nd year
5094.34		3rd year
6260.234		4th year
9767.693		5th year
11660.58		6th year
9957.539		7th year
10858.84		8th year
13477.84		9th year
12021.65		10th year
20991.07		11th year
17653.09		12th year
15907.99		13th year
17445.09		14th year
30141.26		15th year
33698.15		16th year
45839.11		17th year
64718.22		18th year
97478.29		19th year
48545.23		20th year
82320.5		21st year

Fig: return from nifty after annual investment of 1000 per year.

If an investor would have invested 1000 rupee every year since 1989 his investment would have swells to 97478 in 18^th year as per market growth this gain was more than four time than of investments and after the massive correction of 51%in 2008 still the investment was 48545 after investing 20000 in the market.

Shorter term there is always a risk in the market because equity is known for their sharp move however the longer term investment in equity has great potential to give the better return and as we know Indian markets are maturing day by day so there are still a great opportunity in investing the equity so equity is going to the biggest asset creator in times to come.

Sensex to hit 20000 by January 2011

The markets in the developed world have been turbulent over the past few months. In spite of this Indian bourses have kept their nerve and not seen any major breakdowns. This is the most important indicator, that gives the confidence to me that the SENSEX to touch 20,000 in the short term and 23,000 by September 2011. The fourth quarter, however, according to him may be tricky in terms of earnings.

The western market is expected to grow at a slow pace of 1-2%. And, “There are a lot of funds investing in Indian and foreign institutional investor (FII) flow is likely to stay unless there is any external shock.”

When we see the past behavior of Indian market and the fund flow the market is soaked the domestic selling and recorded outflow from the fund due to 3G spectrum. The mutual funds in India seen selling in last quarter however in the same period FII seen accumulating the Indian stocks and strengthening their position in the Indian holding. This is looking first series of serious investment of foreign player and this is looking like the continuous trend because there are only few pockets are now in world where growth can be predicted so India has become the heaven for investment.

So the coming October market is going to take a sharp fall and that fall will be golden opportunity to get in to the Indian market

Advantages of Mutual Funds for Investors

Professional Management

Mutual funds offer investors the opportunity to earn an income or build their wealth through professional management of their investible funds. There are several aspects to such professional management viz. investing in line with the investment objective, investing based on adequate research, and ensuring that prudent investment processes are followed.

Portfolio Diversification

Units of a scheme give investors exposure to a range of securities held in the investment portfolio of the scheme. Thus, even a small investment of Rs 5,000 in a mutual fund scheme can give investors a diversified investment portfolio ,with diversification, an investor ensures that all the egg is not in the same basket. Consequently, the investor is less likely to lose money on all the investments at the same time. Thus, diversification helps reduce the risk in investment. In order to achieve the same diversification as a mutual fund scheme, investors will need to set apart several lakh of rupees. Instead, they can achieve the diversification through an investment of a few thousand rupees in a mutual fund scheme.

Economies of Scale

The pooling of large sums of money from so many investors makes it possible for the mutual fund to engage professional managers to manage the investment. Individual investors with small amounts to invest cannot, by themselves, afford to engage such professional management. Large investment corpus leads to various other economies of scale. For instance, costs related to investment research and office space get spread across investors. Further, the higher transaction volume makes it possible to negotiate better terms with brokers, bankers and other service providers.

Liquidity

At times, investors in financial markets are stuck with a security for which they can’t find a buyer – worse, at times they can’t find the company they invested in! Such investments become illiquid investments, which can end in a complete loss for investors. Investors in a mutual fund scheme can recover the value of the moneys invested, from the mutual fund itself. Depending on the

structure of the mutual fund scheme, this would be possible, either at any time, or during specific intervals, or only on closure of the scheme. Schemes where the money can be recovered from the mutual fund only on closure of the scheme, are listed in a stock exchange. In such schemes, the investor can sell the units in the stock exchange to recover the prevailing value of the investment.

Tax Deferral

As will we know by this time that the mutual funds are not liable to pay tax on the income they earn. If the same income were to be earned by the investor directly, then tax may have to be paid in the same financial year. Mutual funds offer options, whereby the investor can let the moneys grow in the scheme for several years. By selecting such options, it is possible for the investor to defer the tax liability. This helps investors to legally build their wealth faster than would have been the case, if they were to pay tax on the income each year.

Tax benefits

Specific schemes of mutual funds (Equity Linked Savings Schemes) give investors the benefit of deduction of the amount invested, from their income that is liable to tax. This reduces their taxable income, and therefore the tax liability. Further, the dividend that the investor receives from the scheme, is tax-free in his hands.

Convenient Options

The options offered under a scheme allow investors to structure their investments in line with their liquidity preference and tax position.

Investment Comfort

Once an investment is made with a mutual fund, they make it convenient for the investor to make further purchases with very little documentation. This simplifies subsequent investment activity.

Regulatory Comfort

The regulator, Securities & Exchange Board of India (SEBI) has mandated strict checks and balances in the structure of mutual funds and their activities. These are detailed in the subsequent units. Mutual fund investors benefit from such protection.

Systematic approach to investments

Mutual funds also offer facilities that help investor invest amounts regularly through a Systematic Investment Plan (SIP); or withdraw amounts regularly through a Systematic Withdrawal Plan (SWP);or move moneys between different kinds of schemes through a Systematic Transfer Plan (STP). Such systematic approaches promote an investment discipline, which is useful in long term wealth creation and protection

Market trend ..Dollar is dictating the term

Indian markets has shown the different behavior pattern in last two months .Global markets has seen significant decline in June and July but nifty and sensex outperformed the global insides.The FII who were the main driver of the Indian indices although domestic fund houses were the net seller in the market due to liquidity crunch created by the 3G spectrum bid . Indian mutual fund industry has seen lowering of AUM.

Now when world markets is rallying from last 15 days the Indian indices is not catching them this is the primary indicator of the fact that from now onward global markets are going to outperform the Indian market in coming month.

In Indian scripts the heavy weight like Reliance Industries.NTPC, are breaking down and their performance will be key for the further move of the market without reliance we cant breakout from current level.Result season is over and there is no further trigger to drive the market from here onward.

DOLLAR INDEX:

Dollar index 88 to 80 in last two month due to strengthening of euro and other currency although the dollars has taken the support at 80 level and again rebounded towards 84 which is looking like a major resistance for the US Dollar.When the dollar will retreat from the 84 then the market will rally again in September.

So the hot dollars and cool stock is the theme of investment till the year end then 2011 will come with the new ray of strategy for investment world till then dollar move is important.

Crumbling stock market

My last post on bubble building has proven true in recent downturn of equity market.Global market has seen a significant downturn and indian market at the same time touched three month low in this sell off ,the holy grail of indian equity market FII has turned heavy seller and the effect was quite visible on the indian market.

Indicators:

The dollar index gone up to 81 due to demand of the dollar and this move has pressurized the commodity in shorter duration,base metal,crude,agro commodity has seen sell off .

however it looks like that fall is going to arrest for some time at least for two month we will be ready one further leg of downturn in may jun 2010.

Bubble is building

Future bubbles Dollar carry trade

Concept

The concept of carry trade is taken from the arbitrage world where people looks for the risk less opportunity to make money although involvement of risk is not nullified in the carry trade however modus operandi is almost similar to arbitrage.

Here's an example of a "U.S.dollar carry trade": a trader borrows 1,000 U.S.dollar from a U.S bank, converts the funds into Indian National Rupee and buys a financial assets for the equivalent amount in India it may be bond stocks debenture etc. Let's assume that the investment in India pays 6.5% and the U.S. interest rate is set at 0.25%. The trader stands to make a profit of 6.25% as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then she can stand to make a profit more than 62%.

The big risk in a carry trade is the uncertainty of exchange rates. Using the example above, if the U.S. dollar will fall in value relative to the INR, then the trader would run the risk of losing money. Also, these transactions are generally done with a lot of leverage, so a small movement in exchange rates can result in huge losses unless the position is hedged appropriately.

Events

The easy money policy from the central bank’s around the Globe created ample liquidity in the markets, especially near zero rate interest rate policy by US Fed created huge outflow of dollar from the US and over supply of Dollar resulted as the deprecation of Dollar with respect to all major currency and emergence of carry trade, in this trade people takes money from the us due to the negligible interest rate regime over there and park those money in the high return securities around the globe due to this Global markets have rallied "too much, too soon, too fast" this year. but a correction is inevitable once fed will shed this policy the rising inflation is the one important indicator of which forced the regulator to think on easy money policy although it will not happen right away, as a cheap dollar will still encourage investors to seek higher-yielding assets for a few more months however time is short for the people betting on liquidity driven asset.

Recovery of U.S. dollar which is traded at the year’s low is depend upon the rise in interest rate which will led the repatriation of US dollar , but only in "six to 12 months from now, not any time soon."A correction might occur, but the risk of a correction is more in the medium term than in the short term, but the time when the correction will come it will sharp and painful for the equity markets around the globe.

The economist repeating their view that the U.S. economic recovery will be anemic, subpar and U-shaped, which should decipher into worse-than-expected corporate earnings and macroeconomic indicators, eventually forcing asset prices down.

Such a correction will be delayed, however, by a prolonged period of low interest rates and fiscal stimulus.

Many analysts are in the opinion that the real economy will surprise on the downside, especially when the stimulus fizzles out, but on the other side we will have the effects of policies, especially monetary and liquidity, that keep asset prices levitating.

Money wheel

Loose monetary policies around the world has resulted in continuous dollar inflows into developing economies and emerging markets like especially in Asia, which are likely to grow faster than developed world for several years.

The challenge for emerging market countries like Brazil, India will be to implement effective policies to curb excessive capital inflows that have led to appreciation in their currencies, to curb the inflow Brazil has imposed Tobin tax on inflow. The depreciating dollar is creating the risk for the exporter. The solution is probably along the lines of capital controls but capital control is the toughest step for the capital deficit emerging markets. Here money is chasing their growth with objective to get more return in shortest time and creating volatility in their markets. This is the reason behind the imposition of tax on inflow by Brazil.

Impacts

The beginning of carrying trade has infused the liquidity in the financial and commodity market around the globe. Chase of U.S.dollar pushed the Gold, Crude at their highest levels in 2009 and same effect has observe in equity around the globe Brazilian market has gone up by 145% on strong dollar flow. Dollar index came down sharply to their year high 89.62 on 4th march to the year low 74.17 on 26th November and take pullback from there. In the next six month when economy will come on growth path then inflation will be the primary agenda for the fed and they will increase the interest to suck the excess liquidity from the market. Rise in interest rate will trigger the unwinding of dollar carry trade. The unwinding of trade will create volatility in the stock market around the world it can led to another stock market carnage in the emerging market because significant amount of fund by FII and hedge fund has been pumped into the equity markets during their up move.

FIG:Dollar index 2009

Unwinding the trade will create negative impact on the local currency and unusual depreciation of the local currency will be disastrous for the exporters and their profit margin will be impacted

Time magazine Person of year 2009.....Bernanke

Time declared their man of the year 2009.
Federal Reserve Chairman Ben Bernanke, who worked to steer the U.S. economy through its darkest days since the Great Depression of 1929, was named Time magazine's Person of the Year 2009 on Wednesday.
"The recession was the story of the year. Without Ben Bernanke ... it would have been a lot worse," Time managing editor Richard Stengel said in a statement.
Bernanke, 56, a former Princeton University professor, is the student of the Great Depression of 1930,and their eye witnessed experience has helped him to frame the strategy to fight the recession and so the result is here the recession came as a shock and it is almost on the verge of an end as per US GDP data.This recession handled well by the fed chief and he deserve the credit.

Dubai event led the recovery of market...

Ripple effect of Dubai crisis was in the clouds of Asia and markets in this region were opened sharply down however the surprise support of Abu Dhabi to the troubled company changed the mood of the market in the region. Markets' initial reaction to the Abu Dhabi move was understandably positive, with the cost of insuring Dubai sovereign debt plummeting by more than 120 basis points.
But the fundamentals have not changed. Dubai remains leveraged and in the immediate term Abu Dhabi is the source of financial liquidity. Including Monday's move, Abu Dhabi has pumped $15 billion into Dubai, with a further $10 billion coming from the United Arab Emirates central bank.
The capital market responded positively on this development ,Asia recover their initial loses and turned positive ,Europe opened 1% higher followed by US market.
INDIAN MARKET
India open slightly negative in the morning and recovered from its low and get in the positive territory however the inflation number trigger the sell of in the market in the afternoon session and market again turned negative at the cost of BANKEX ,technically market is in the range bound and very soon it is going to give a good breakout and march towards 5300 which is the immediate target of nifty in near term .
Tuesday is going to critical day for market and their is more chance is here that market will march ahead from here onward.