Sensex opens lower, reverses and closes up as SEBI backtracks on its threat on Pnotes – the market may follow US market downwards
Babu Ghanta
Oct. 22, 2007

Sensex opened lower. SEBI came out and backtracked on its threat to curb virtual gambling on the market by the foreign financial institutions (FII) and traders through carry trade. The FIIs rejoiced at their new lice nse to gamble on the Indian stock market. They bought again with carry trade and the market reversed.

The Sensex opened with a hugely negative gap of 300 points at 17,260, and dropped to a low of 17,171 in early trades. The Sensex opened with a huge negative gap of 300 points at 17,260, and dropped to a low of 17,171 in early trades.

Then banking stocks had a great day. The market internals looked weaker than normal although the advancing and declining stocks were even. The larger question is the longer term. The US stock market may guide Indian market from now on. Most of the FIIs are from US and are pegging their bets on the Indian market based on what happens in US. As the US moves into recession and perhaps a nasty depression because of mortgage fiasco, budget and trade deficit, real estate bubble and merger and acquisition bubble, it will Indian markets with it.

The FDI inflow can reverse as the US companies face credit, liquidity and profit crunches. The bear market in Sensex will see some nasty crashes as the FIIs pull out and run for cover in 2008.

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Sensex opens lower, reverses and closes up as SEBI backtracks on its threat on Pnotes – the market may follow US market downwards
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The FDI inflow can reverse as the US companies face credit, liquidity and profit crunches. The bear market in Sensex will see some nasty crashes as the FIIs pull out and run for cover in 2008.
READ MORE>>

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