Investment Scenario

November 22, 2007 at 6:48 am Leave a comment

Hereby i would be discussing something about the present scenario of the Indian Market. A week ago Indian Stock exchange (Sensex) traded at the third largest loss approx. Rs. 680. Now such a situation took place due to the major effect of FDI. Again there is a well known proverb that ” A bigger fish always eats the smaller one”. Such is the thing with our stock exchanges too. Today the world has become a smaller place to live, apart from living, it has become a smaller place to trade in too. Every business is interdependent. Smaller companies invest in the bigger companies.

Like this there becomes a whole heirarchy of the business. Now the answer to the question that “Why does a market experience a sudden rise or a fall?” comes here.

All smaller businesses are dependent on the parent company they invest in or they trade with or they are in business with. When such a parent company experiences a great profit or is growing then the smaller businesses associated with it will also grow. This is the time when you see the bull run in the market.

Now, when the same company is going bankrupt, or the business slows down for such a company then the partner smaller business with also be affected. This is the scenario when the market goes into the bear run.

Now discussing about which is the best sector to invest in in the present scenario, my view goes towards the PSU banks.

Banks uptill now have increased the interest rate so higher that now it is nearing the saturation limit. Above which it would be difficult even for the normal being to invest in. Also comes the question of Rupee strengething against a Dollar.

We can forecast a stage with in one year of span when these PSU banks has to lower their interest rates. And this would be the best period when the market for such a sector will boom and you can get the best return on your investments when you invest in them now.

Well this is what i liked to share with you.

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Entry filed under: Business-Finance. Tags: , .

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