The Korean Crisis - As per the Reuters report, North Korea has alleged that South Korea started firing shells and North Korea only responded to the firing. However South Korea claims that although it was firing shells it was in the west and merely test firing the shells.
The Irish Crisis – With Ireland requesting a bailout from the EU, probe has begun again in Spain & Portugal. With political instability in Ireland, getting a bailout for now seems difficult. However as per the latest Wallstreet journal report, EU has stated that the political crisis in Ireland shouldn't affect negotiations on Irelands bailout.
US Crisis – With the aftermath of the 2008 crisis still at large US, the FED has started probing big banks again to conduct a stress – test. The SEC also raided some of the Hedge funds sending shockwaves across the financial world. With the US housing data expected tonight i.e. 23rd of November 2010 the bulls of the stock markets could face some beating.
However all said and done, India still remains a good investment bet. If at all a war was to break out in Korea, India would ideally take a neutral stance which would keep the macro economics of the country stable. The 2G Scam that could have triggered massive macro-economic instability seems to have been handled carefully for now by the Congress.
In such a scenario, the stock market fall could turn out to be nothing but a minor correction before the Nifty hits levels of 7000+. We stick to our stance that SIP was the best route of investments post Diwali since historically for the past 10 years or so, every November we witness a downfall which lasts till December which turns out to be nothing but a buying opportunity.
We believe that investors having positions in the F&O space should roll over to the January series and wait for their turn to earn money. Traders can go short even at these levels for the December series.
Hope this provides some soothing to your nerves.
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