Sensational to subdued!

Subdue your passion or it will subdue you - Horace.

What a sensational start and finish as bulls conquered Mount 19K. But then today is a different day as the start is likely to be a bit subdued. Asian markets are mixed and the US stocks didn’t exactly set Wall Street afire.



The good times may last a bit longer after a mild cooling. A strong Indian economy will continue to attract global investors. Valuations may be on the higher side but that has always been the case with India. So, liquidity won’t be a problem, hopefully.

But, inflation is still uncomfortably elevated and is unlikely to subside for some time to come. The latest update on inflation today will provide more clarity as the Government will release a new WPI series that promises to be more accurate and less volatile. How it will turn out only time will tell. Not only the markets but even the RBI will closely follow the inflation numbers ahead of its policy review on Sept. 16.

There is no need to be scared if there is a mild correction. At the same time, one should not be delirious either if market continues to rise. Ride the current momentum but one should be ready for some moderation in stock prices following the kind of rally that we have seen of late.

Globally, things appear to be stabilising. China is not slowing as rapidly as one thought and the US is not sinking as badly as anticipated. But problems remain very much in place for the global economy. The recovery will face hurdles along the way. Still, the markets may remain resilient in the face of adverse economic data.

FIIs were net buyers of Rs25.19bn in the cash segment on Monday (provisionally), according to the NSE web site. Local funds were net sellers of Rs9.6bn. In the F&O segment, the foreign funds were net buyers at Rs14.25bn. The foreign funds were net buyers of Rs11.77bn in the cash segment on Sept. 9, according to SEBI data. Mutual Funds were net sellers of Rs2.86bn on the same day.