Bull rally begins

After 2 years of downside move markets have turned bullish post the corporate tax cut announcement. After which any kind of negative news like the lower GDP or even attacks on Iran’s Army boss, which was touted to be the beginning of 3rd World war by the media. Stock markets brushed off all the negative news. When negative news does not take the markets down, it is a clear indication that, all the downside is over for now.

The market is waiting for good news to come, which might take a little more time. Then it is going to be boom time.

Polarisation in the markets made investors along with fund managers and advisors get into pain. Now that is over, we can see the gains shifting from SENSEX to mid and small-cap segment.

Post corporate tax cut, SENSEX has moved up 2.5%, while Mid caps went up 4% and Small caps moved 10%. It is a good time to move money into equities, the next 2 years are going to be big gain years.

Golden tree Zee complains of negative forces

Zee group was the biggest loser this week. Their chairman blaming about negative forces destroying their wealth is a little too childish. Zee stock was bearish since Aug 18, all the present developments like promoters shares almost fully pledged, all the companies carrying huge debt, losing money on wrong decisions have only aggravated the condition. I remember having a meeting with one of the ex-senior of this group, where I was a little taken aback when he said, ‘everything said & done it is a “seth” owned management, they have lot of cash dealings. One should always be good with the bada “seth”, if he has to stay with the company’. After hearing this comment, when I used to find Essel Pack stock going up in the recent days, my mind was somehow confirming that it is not a good sign for the stock and it sees a single day collapse of 17%, washing away almost 2 months of price rally. The group including all zee channels, Dish TV and Essel Packaging together are running more 5000 Crores of debt and about 75% of promoter holdings is pledged with banks. Now when the stock price goes down, the promoters not only lose the valuation, they also get margin calls from banks due the value erosion. Satyam was a similar case which is now history. Looks like we are going to see more of our big names getting out of the markets in the coming days.

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