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Tuesday, June 5, 2012

06/06/2012 stocks news

SAMWATSARE VIKAS PARSHURAM 

We Dare To Predict.......

Where Dreams Come True......

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The Rupee sank to a record closing low on global investors' flight to 
the safety of the US dollar amid fears of euro area disintegration, and 
worsening of domestic inflation that could deter fresh overseas fund 
flows

Rupee fell 0.6% to a record closing of Rs 53.957 to the dollar as the 
greenback rallied across most currencies due to failure of political 
parties to form a government inGreece that puts the global financial 
system at risk. The euro slid to a four-month low of $1.283.

Further slide in rupee could bloat overseas debt of Indian companies and
 fuel inflation. That may force the central bank to intervene more 
aggressively, and come up with policy measures including the funding of 
oil imports from $295 billion of foreign exchange reserves. 

Yesssssssssssssssss

Doom and gloom are everywhere at the moment. Greece, a slowdown in China,
 and fears over the U.S. economy are rampant, but an analyst who is 
hardly one of the market’s great optimists is predicting the Dow Jones 
Industrial Average could hit 100,000.

Having gone back to the Great Depression to look for examples of major 
bull markets, Philippe Gijsels, the head of fixed income research and 
marketing at BNP Paribas Fortis, has come to a rather startling 
conclusion due to the amount of money being pumped into markets by the 
world’s leading central banks.

“If central banks continue to inject football field after football field
 into the markets and the economy, could this in the long-run lead to 
anything else than inflation ?
 Or are the injections just enough to compensate for the massive 
deleveraging in the financial sector and with the over indebted American
 consumer? Time will as always tell,” Gijsels said on Monday.

“This being said, what is certain is that we are looking at the largest 
financial experiment in history. An experiment of which nobody can 
really guestimate the consequences. There is simply no point of 
reference” Gijsels said in an interview with CNBC.com.

Up until now, Gijsels has been working on the assumption that a new 
structural long-term bull market can begin only once the world has rid 
itself of its mountains of debt.

He has gone back to four key periods in history to try to understand how the great deleveraging might affect stock prices.

“If we go back to the beginning of 20th century, we can distinguish four
 long-term periods. And I will not call them a winter, a spring, a 
summer, and an autumn. First there was the period after the big crash of
 1929 until the end of the Second World War. What we are looking at here
 is a period during which there was literally no progress made,” said 
Gijsels. “After that, we had the period of rebuilding after the war and 
the ‘golden sixties’ that saw the Dow Jones [Industrial Average] 
increase tenfold over a period of 22 years.”

Up next came the 70’s, with their soaring inflation and oil crisis, 
leading to over a decade of sleepy returns for the Dow industrials 
before the good times returned.

“At the end of the period, 1982, the Dow (industrials) stood at 1,000, 
the same level as at the beginning in 1966,” Gijsels said. “In real 
terms the performance was even worse, as high inflation levels made for a
 very negative real return.”

Then we got the strongest bull market in history, from 1982 until 2000, when the Internet bubble burst with a vengeance.

“From 1982 until the speculative Internet top of 2000, the good old Dow 
(industrial average) went up more than 13-fold,” said Gijsels who is 
beginning to think something similar could happen again.

“Since 2000, market performance has been hit by a series of crises, 
which are in fact all one and the same crisis, namely a debt crisis. The
 consequence of the fact that there is just too much debt in the system.
 Each time when central banks inject liquidity through rate cuts, quantitative easing, or [long-term refinancing operations] we see a brief rally, which just as quickly falters as the pickup in growth proves unsustainable.”

The bad news is that we are still a long way from the current crisis 
ending, but when it does, Gijsels said, there could be massive returns 
for investors.

“For if history were once again to repeat itself and stock markets would
 once again see a tenfold increase over a period of 25 years, the next 
magical figure of 100,000 for the Dow could come into sight,” said 
Gijsels. “It sounds spectacular. However, this is the move that we have 
already seen twice over the last 80 years.”

“A large part of the move could be accumulated though the magic of 
multiple compounding. Another part through the less magical phenomenon 
that we call inflation,” he said. “To move tenfold in 20 years, we would
 need 12.2 percent on an annual basis in nominal terms. This looks like a
 lot, but it is doable.”

“All this, of course, is under the assumption that the dragons that 
haunt us can be slain over the next couple of years, and that the West 
succeeds more or less to keep its position in the world,” said Gijsels. 
“Otherwise we should maybe do this exercise for the Bovespa, Sensex, or,
 why not, Chinese market. Quite a number of challenges lie ahead in the 
coming months and years. However, to not believe in progress and human 
inventiveness would be really pessimistic.”

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What To Do Today........

Nifty....Today Face Resistence at......4885...4930...4975

Nifty.....Today Support at ....4815...4755...4705

Nifty Range...4200--------6600
VIKAS P SAMWATSARE RESEARCH......

NEXT TGT FOR

WE SHORT NIFTY @6100 TGT 5350 / 4800

OUR 1 TGT HIT NIFTY 5350 OUR 2 TGT ALSO 

DONE 4850 NEXT 4600/4200

Our Opininon for Today's Market.......

1.Stock Specific Movement Expected Today ......

2.Midcaps Looks Good....