Sensex in past nine Novembers

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November is usually that point of time when quarter-two results are over and the RBI policy review is also complete. The markets, thereafter, to a large extent starts adjusting itself to these two major events

CJ: sarmistha neogy

Tue, Nov 03, 2009 10:20:02 IST

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SINCE THE beginning of the 21st century, November has been generally quite a positive month, barring the last two years, (2007 and 2008), where there were losses of 2 per cent and 7 per cent, respectively.

The month of November from the year 2000-2006 has ended on a strong note with an average gain of 8.4 per cent for the Sensex.

November is also usually that point of time when quarter-two results are over and the RBI policy review is also complete. The markets, thereafter, to a large extent starts adjusting itself to these two major events.

This year the Reserve Bank of India (RBI) kept key rates unchanged while the central bank did away with some of the special liquidity measures which were announced in the aftermath of the global financial crisis. The RBI in the last one year had pumped in huge amount of liquidity in the banking system to revive the domestic economy.

A 100 basis point hike in Statutory Liquidity Ratio (SLR) and warning of likely higher inflation around 6.5 per cent with an upside bias by this fiscal, dented the market sentiments. The RBI raised the provisioning margins from 0.4 per cent to 1 per cent and warned against likely non-performing assets (NPAs) from this sector. Thus the markets seem to hold a bearish tone because of the hawkish RBI policy.

The quarter-two results in this fiscal have been kind of below average. The net profits have risen mostly on the back of cost cutting measures rather than actual growth. So also, the Sensex after the recent 100 per cent rally in the last six months is now showing signs of fatigue.
Global markets led by US were quite volatile in recent days thus the market scenario as of now looks quite uncertain. May be some major trigger from either the Indian or the global market dictate the future trend, till then can we still hope for a bright November?