T

he eyes are on the United States of America who were shaken by the credit ratings by Standard & Poors (S&P). No matter what it does, the US tries to defend itself. The Global market will continue to be in the shadow of troubled US economy and the Euro-Zone trouble. The bankruptcy condition in the Euro-Zone has created huge tension in the European Union as it has always tried to give extensive support to its countries and its economy. The bailout package is just being pumped into bankrupt nation but its attempt to recover the bailout package has left them unexplained. If this condition prevails and more nations from Europe go into destabilised economy the European Union will find it difficult to handle the situation. As far as the Indian markets are concerned, they are likely to be hit by global ongoing situation because of the direct impact on major currencies like the dollar and would also face the shortage of foreign direct investment. The Indian corporate world is concerned over its investments abroad. The present situation has left them to find its wealth in the domestic market which is stabilised compared to the outside world. The Indian industries have been divided into two kinds one with shortage of money and other with excess money. The companies which are facing shortage of money for its current project are left in dilemma. Proposed plans are being forfeited as companies struggle to find new business and its growths are tamed. Other types of companies, which are in excess of funds, are finding it hard to find new acquisition. Companies all around the globe are trying hard in strategies to reduce its expenditure rather than expansion as they feel to play safe. Indian major stock exchanges like the Bombay stock exchange [BSE], and the National stock exchange [NSE] has seen huge ups and downs in recent times as it is heavily bombarded by global recession fears and also the ongoing domestic problems like the inflation. Automobile sector is likely to be hit because of increase in fuel rates. The auto industry need to secure itself from getting itself into dark as fear looms largely over it. The auto sectors are revising their sales target as they know the impact is sure. Auto industries are extra-cautious as they feel the heat of rising raw material input cost, employment salary as well as slowdown in sales. As far as metal stocks are concerned they are likely to be in mixed state as they are watching the gross domestic product [GDP], and the also the export sales. If market seems to in semi-expansion mode the companies will surely get their pie in it. If the global slowdown hits once again the movement of metal stocks will surely be in negative.

The movement of gas stocks will be good and healthy as there is a stabilized growth and the international oil prices may be under control for some period of time. Consumer goods will be in good pace as the Indian domestic market is non-volatile and is maintaining consistency. Consumer goods stock will only be hard hit if and only if the global growth is in free fall mode. The biggest challenge troubling India is inflation rather than global slowdown. India and China are the countries which are in growth stage because of its domestic markets regardless of their export sales. China has been better as compared to India during the 2007 recession as it had done all the possible attempts to boost its domestic economy. Healthcare stocks will be in good movement and their performance would also be in better shape. Healthcare stocks performance will be good in Indian markets as well as the global indices. Healthcare firms abroad growth would be slow but steady because developed countries will try to protect their firms growth and restrain from other economies taking advantage. The Reserve Bank of India [RBI] is in damage control mode, tackling inflation, so to keep it under control. In this process the Reserve bank has increased interest rates in order to keep inflation checked. This would show some negative graph in growth but it is necessary to curb inflation. Increased interest rate has affected borrowing loans for automobile and for real estate projects. Real estate prices are likely to fall which in turn will constrain the prices. Banks stocks will be safe as banking system in India is much safer than anywhere else in the world. The credit exposure is closely monitored by the RBI. Recently banks have become extra cautious because of bad debts, but the banking sector is much strong in India. Similarly private insurance companies are really worried about their business. The increase in insurance is marginal. Mutual funds asset manager are put to their test as market investment are in up down fashion. Investors are much interested in systematic investment plan [SIP] scheme as the returns are better than the other ones. My advice for the investors is to be cautious and should be slow in investment. Short term investment should be avoided as they may turn out to be much risky. Long term will serve better in this present volatile condition. Fixed deposits in banks or healthy companies will also serve you better. Investments in yellow metal (i.e. gold) will also be good, as gold stocks are in good form because of depreciation of global currencies. This also implies to silver. Remember only slow and steady investment will yield results in this volatile global market.

Writer: Shetty Shreyas e-mail:shettyshreyas076@hotmail.com

Note: all suggestions of the writer are based on experience. The writer is not responsible for any mistake. Investments suggestions are just reference to market condition. Investments are subjected to market risk.