Markets Last Month
- Indian markets witnessed a sharp correction in November and December on deteriorating domestic economic data and falling global equity markets. The Indian markets are down by 25% in the year 2011 till December 19
- Domestic macroeconomic data: GDP numbers, IIP and PMI, auto sales and cement dispatches continue to trend lower indicating slower economic growth having its impact on Indian corporates
- Global news flows on economic activity remain weak with economic data points from Europe, China and the US remaining weak indicating global economic activity remaining dismal
Going ahead
- The overall trend of the market remains weak on expectations of a further downgrade of Q3FY12 and FY13 earnings growth and on lack of sustained positive global news flows as broader concerns around difficulties of European sovereigns to manage their debt with current high yields remain
- With sentiments being negative, the markets may continue to trade with a negative bias. Investment with a short term horizon should be avoided
- Short-term investors should wait for negative global news flows to subside and the markets to settle down
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