BobsBanter.com

Factors causing Market Crash

There was a bloodbath in Dalal Street over the last 3 weeks. The carnage in dalal street has eroded not only 2700 points in BSE index but also the confidence of the retail investors. Added to the turmoil is the media outcry of imminent market crash and all the technical chartist projected by the medial has given a sell call on the market despite a market melt down. This resulted in the complete buyers strike.

 

Factors which caused the market meltdown

 

Heavy FII unwinding in cash market to the tune of almost a billion dollars in the last 3 weeks

Heavy shorting by FII in the F & O segment

Buyers strike by HNW and retail investors

Sharp fall in the global and Asian markets

Sharp rise in the crude oil price

 

Indian market has corrected by 32% from the peak of this year in dollar terms while most of the Asian indices (excluding China) has corrected only in single digit. Indian has the worst performing market among the large markets in the world,

 

We strongly believe in India fundamental story and we expect the inflation to cool off in the coming months. In the process of meltdown the following sectors were beaten beyond recognition.

 

Banking ‘

Real estate

Infrastructure

Oil refinery

 

We see this as a great opportunity for value buying.

 

Some of the strong blue chips which are also a part of the F & O were beaten by more than  15% in the last 7 trading sessions.

 

 We see a strong pull back rally from today onwards on account of the following

 

·         Short covering by bear operators

·         Emergence of buying by long term investors

·         Improvement in the global market scenario

·         Softening of crude oil price

·         Improvement in the macro economic environment in the US market

 

The following shares can bounce back sharply in the coming days

 

Bank of Baroda CMP Rs.217 fallen by 15% in the last 7 days

Bank of India CMP Rs.253 fallen by 18% in the last 7 days

HDFC Bank CMP Rs.1130 fallen by 15% in the last 7 days

Jaiprakash Industries CMP Rs.177 fallen by 15% in the last 7 days

GMR CMP Rs.107 fallen by 17% in the last 7 days

HPCL CMP Rs.196 fallen by 20% in the last 7 days

BPCL CMP Rs.285 fallen by 20% in the last 7 days

DCB CMP Rs.57 fallen by 19% in the last 7 days of trading

 

We see a strong bounce back happening in the next couple of days which will see strong recovery in the above mentioned shares.

 

 

 

Your response/ comments to this article will be published underneath. Please do write your comments in the space given below