Stock Shastra

One of the most favourite questions among stock investors is : Is the Sensex fairly valued? Be it retail investors, analysts, FIIs, Corporates or the Government, the answer to this question has implications for all parties concerned. Afterall the Sensex will go up if there are more buyers and go down if there are more sellers. So, what is the general verdict? What do people feel about the current levels of Sensex?

As Finance Minister Pranab Mukherjee is all set to present his second full budget on February 26, there are some key concerns like rising fiscal deficit and withdrawal of stimulus measures, lingering in every investors mind. Here I have tried to analyse these concerns by looking at possible scenarios.
The stimulus packages have worked and as a result economy has again started registering positive growth. But the bad news is that, the government is under pressure to begin fiscal consolidation as India’s fiscal deficit has reached dangerous proportions on the back of the stimulus measures and due to rising government expenditure. The Prime Ministers Economic Advisory Council (PMEAC) has already warned the Govt that it can’t continue with unsustainable fiscal deficits recorded in the last two years and will have to start fiscal consolidation in the coming fiscal year (2010-11) to ensure fiscal sustainability, contain interest payments, to avoid upward pressure [...]

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Affair between the Stock Market & RBI Monetary Policies
Is it so? So, what do you think, is there actually an affair between the two? Who is the more dominating one? Does a change in one’s mood immediately affect the other? Or are they like the timepass couple, quite indifferent to each other.
Before you think this is like some relationship consulting blog, let me confirm it is purely a financial one. So, let’s get back to our couple- monetary policies & stock market.
Does a slight twist in the monetary policies affects the stocks or is it the other way?
We all probably read in today’s paper that our Finance Minister Mr. Pranab Mukherjee has asked banks to cut interest rates and provide cheap credit so as to boost the economy. This is a way in which cheap credit is made available to the public in hand.
But how does a bank [...]