The Hindu Business Line : Waiting game on for retail investors, but for how long?

Mack (an American expat working in India), Bidyut (an economics professor), Divya (a journalist) and Jogin (an economics student) are spending a lazy Sunday afternoon sipping on lemonade when the TV crackled with news about the US elections.

Jogin: Everyone seems to be betting on Obama.

Mack: His campaign has always maintained

Momentum. So the optimism.

Divya: It is time the Democrats came to power.

John McCain as president would only be a shorter Bush.

Bidyut: I would put my money on Obama. If not any

thing, he wanted to reorganise the financial regulatory

system before the economic crisis began.

Jogin: And McCain called for the same after the crisis.

Mack: One thing they both agree on is that the winner

is gonna wear a crown of thorns.

Divya: Several vocal opinions in India have been

pro-Obama. Remember the puja for the Senator

at a temple in Coimbatore?

Bidyut: Hmm … you and Amartya Sen are betting

on the same horse. He said Obama could pull the

US out of the recession.

Divya: Obama’s victory could help the markets.

That and the RBI rate cut would show some bull run.

Jogin: Seems the RBI is desperately trying to get

banks to cut interest rates and boost liquidity.

Mack: Apex banks across the world have taken

similar steps. They are helpless. Maintaining a flow

of money is of primary importance now.

Divya: Will it increase spending in India? I can’t

imagine anyone spending unnecessarily, especially

with threats of job cuts still looming.

Bidyut: Well, auto companies have reported a dip

in sales. Most people would not be interested in

buying till a level of certainty creeps in.

Divya: Which is exactly what the apex banks are trying

to cultivate – certainty.

Mack: Cement companies will soon say how much

stock they sent to retailers. That and the auto figures

should be a indicator of what the sentiments are like.

Divya: Also, the government removed export duty

on steel products primarily used in construction.

That could up the real estate sector.

Mack: Yeah, but experts say that this would not help

the big players. Small and unorganised players rule

this market. So construction need not go positive.

Bidyut: Construction has been thriving in the

West Asia. Now, several finance professionals are

also trying to get jobs in this region as activities

have not dulled much there.

Jogin: Hey, let’s not forget the proposed FDI hike to

49% in insurance companies, a long-standing demand.

Divya: But don’t count on that bill getting passed by

the Parliament easily, and especially now.

Jogin: What I am interested in is how long these

steps will keep the markets up. I mean, when will

the real issues be sorted out.

Bidyut: Most retail investors are waiting and

watching. They will make a move the moment they

see some positive signs. See how the market ended up

at the end of a bear month on some cues.

Jogin: As of today, the waiting could be on for long.

Divya: Meanwhile, sip on some lemonade to make

the wait less bitter.

Ram with inputs from Bad, Yog

Blog at http://MarketChat.blogspot.com