Now Bears are going to love this blog. We at wiTdom are predicting that worst is yet to come .After evaluating macro and micro economic situation we feel that economy is still not out of the woods. Problems in Europe have not been resolved but panic is just been delayed by liquidity injection by ECB. Hard landing in China is here to stay being a growth engine of the world any slow down indication is going to jolt the growth of world economy. We expect that by early 2014 all commodity prices and asset prices are going to touch new lows. Any where in end of 2013 we may see new low on stock markets around the world which will be below 2008 lows. Now each one of you know that 13 is evil and cat is going to create lots of pain and anger on living being on earth. American economy is improving and stands at much better poison so our love for dollar still stays intact.
Our view for Nifty and sensex is negative .The New General Anti-Avoidance Rules (GAAR) provisions which will be applicable from April 1 2012, will see large scale selling pressure from Foreign Institutional Investors, with markets still unclear on the impact of the provisions. It may be recalled that Union Budget 2012-13 had provided for GAAR, following the Vodafone Supreme Court verdict in favor of Vodafone. FIIs will sell heavily on fears that the Union Government may raise tax demands as a result of these provisions. It is now believed that P-Notes through which billions of dollars flow into stocks will now be taxed. Any closing below 5160 can take Nifty to low of 4500 if 5080 is breached. We expect lots of selling by Hedge fund community in coming days.
Sr Vice President and Head of Equities
wiTdom investment advisory.