Dear members,

USA crisis is already burst and spread to all over world. There is no direct impact to India but indirectly it is affecting, full credit goes to LEFT parties there is no doubt. Even though the PF (pension funds) is already invested in market is already in huge loss. Currently market is over reacting to USA crisis, as afar as valuations based. Looking PE leaders are now below 5 PE. Looking future earnings it will be lower, certainly slow down expected still it is worth. Sensex based shares current PE is at 10.63, looking future it will be below 10.

The main reason for selling is to meet loss in other countries they forced to sell position. Currently over 16 BN already pulled out by FIIS. It must be noted that selling is only in stock market but FDI section investing is still increasing.

3 Stage bail out plans success will decide future of not only stock market but also in physical or economy. Initially $250 Bn will be given to companies and banks. The idea was that banks would use the money to start making loans again. But reports surfaced that bankers might instead use the money to buy other banks, pay dividends, give employees a raise and executives a bonus, or just sit on it. Insurance companies now want a piece; maybe automakers, too, even though Congress has approved $25 billion in low-interest loans for them.

What made USA more interest on Nuclear Deal than INDIA?

                As far as we are stock investors we are very happy about deal but as a citizen we are not. The deal is around _______. This is not main reason for interest its more than money, they have no strong alley near to China. More over it will help their next petroleum country, its countries luck that USA got into financial crisis otherwise they already started attacking petroleum country. Any way attacking plans are still on way but will take few years. Iran-Pakistan-India pipeline is the other reason. There was a high possibility of extending it to China also, means no doubt why they frightened if the whole 4 countries becomes alley. It would have given more strength to Iran, huge tax profit to Pakistan, if extended to China, huge tax profit to India also.

Since last time nuclear station blast years ago, Usa given less consideration to Nuclear based companies, now the deal will help these companies, so it is additional benefit to them.

Anyway the deals future will depend on new government, there is no guaranty that Dr. Manmohan Sing to rule again, even if congress wins.

We know 123, now 126

                We all already know 123 rules, there is no doubt about rules as far as USA say or written in letter book, that deal will be depending 123 rules. We had already 123 rules 2 or 3 letters before, now 126 is new agreement that will be totally based on defense section. That is, will the now finally ready 123 Agreement for civilian nuclear cooperation between US and India give American fighters the required thrust to zoom ahead of other contenders in bagging the IAF project to acquire 126 multi-role combat aircraft (MRCA)? The US certainly thinks so, and is once again dangling the bait of spin-offs from its futuristic fifth-generation fighter (G-5) programmers if either F-16 'Falcons' or F/A-18 'Super Hornets' bag India's gigantic Rs 42,000 crore ($10.4 billion) project for 126 MRCA. The MRCA project, after all, basically involves fourth-generation fighters in terms of avionics and weapons, with the contenders being the Russian MiG-35, Swedish JAS-39 Gripen, French Rafale, Eurofighter Typhoon and the American F/A-18 'Super Hornet' and F-16 'Falcon'. 

But the US is way behind Russia as far as attracting India to its G-5 fold is concerned, even though its programmed is far more advanced. "The F-35 presentation was only that of a preliminary nature. Still USA will force 126 as INDIA new friend.

Depending more on other countries is not good method. Its consequences will be very high.

Future of Market

                USA crisis will impact indirectly to India. Still it is impact and will witness slow down. Currently market is over reacting, recovering 21000 is totally depends on global trend. We don't mean Dow must come to 14000 but present volatility, new banks or company's loss must not increase in coming months. If all settles we will confidence getting back, because it is natural money will be invested where growth is present. There is no doubt about India's future then some benefit will be at stock market.

We believe that good companies can be bought at 21000 or 10,000 makes no difference if fundamentals strong.  A well known company may not give you good return. Best example is realty companies, most of well known realty company's current rates are 10 times or more low than their highs made few months back. It must be noted present well known companies are penny stocks in past, so try to identify companies.

Most of well know companies are still at lower levels based on fundamentals so such shares not to be sold at present level. It will start up trend again once sentiment gets back, or as you know as the growth is happening it will force share price to go up. Because as the dividend, bonus etc will give buying pressure. So donot get panic, be patient.

Happy Trading,          

Neeraj M S

Mathruppillil(H),

Thrissur (Dist),

Kerala.

E-mail: neerajms@...

Web Site: www.lakshmistockgroup.com

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