newsletter 14 march

With strong global cues today the share market gained over 5%. The market gained 412 points to end up at 8756. This is one of the strongest sessions in recent times.

During these times its better to stay invested on Large caps especially the shares that are included in the sensex. This is mainly because to attract investors artificially these shares are inflated. Also Large caps are a safe bet during these times because of its sound fundamentals.

In today's share market the main gainers were the Large caps. Mid caps and small caps didn't see much of rise in their shares however they may see the same on Monday if things are positive.

Inflation was seen at a seven year low at 2.43%. RBI had predicted saying that the inflation would be seen below 3% before the end of the financial year i.e. March 31 but this week itself it went below 2.5% to beach seven year lows. Last week inflation was close to 3%. Globally even UK expected their inflation to fall to a four year lows. With inflation rates falling everywhere these are seen as an indication for good times ahead.

Satyam announced the start of the bidding process for the sale of its 51% shares of which 20% is to be bought from the market though an open offer. This is seen as an opportunity for the investors hence the shares saw a surge by over 30% in the last two days. However today it was struggling to keep up its value today. However, it would be better to stay away from this stock. There has been no minimum bid for the buying of these 51% shares by the possible suitors. Hence it would be difficult to predict the exact value these shares would fetch. Many of the suitors may be in the fray only because there is no minimum bid.

satyam bidding

Globally Citibank announced 19 dollars revenue in the first two months of this year. This has been seen as a surprise after the bank has been seeing huge losses and receiving two federal bailouts in the last few months. This is perhaps an indication of the revival of the economy though it may take sometime to recover. This economic slowdown was created due to the US banks and now if those banks are recovering from their bad times then its good for the global economy.

This is the reason, the lows seen now in the sensex may not last long. It would be better to invest at this point of time, but only in stages as it has to be seen for how long the market would be bullish. My picks for investing now would be RNRL, RELCAPITAL, SBI, IBREALEST, LNT(in case its not successful in the bid for satyam this would see a sudden surge in its value).

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