Dated 27th October, 2008

Indices are trading at levels not seen in the last 3 years. Another week of selling saw Nifty losing close to 16% and Sensex losing around 13%. The last trading session was particularly severe and almost stocks from all sectors were sold off with out any support. This phase is arguably “the Worst” for our markets so far. Blue chips losing 20-50% in a single day is a rare sight to behold. Technology heavyweights were holding strong in an otherwise weak market and Realty was the worst loser. Uniteh, Suzlon, Nalco, M&M, Tata Motors, DLF, Tata Steel and Hindalco were the top Nifty losers while TCS, Satyam and Infosys were the top gainers.

A bounce back should be the least one could expect after a fall of such magnitude. Markets are defying all laws when it comes to this fall. There is no support at any level and hence one should not be very aggressive buyer at this point of time. The alacrity with which stocks are being sold off, suggests large-scale exodus of funds and not just liquidation. It might take a long time for these wounds to heal and hence one should stay away. We recommend even long term investors to stay away at this moment since the results for the coming quarters are likely to surprise even the most pessimistic estimates. There is a sense of gloom everywhere, which is likely to stay for more time. For the time being avoid the markets and traders make the most of it. Many stocks are likely to see more falls and hence short term short trades may be profitable. The best thing still is to stay away.