This might sound like a T20 event or another sporting format; but the title just conveys the today’s closing index level and it sounded rather catchy. We had a rather nervous start to this week and slowly but surely appears to be consolidating on the upside. The front runners of today seem to be the stock which have corrected sharply through the gory month of Nove12mber 2011; and not necessarily the high beta names. Tata Power for one, Ambuja , ACC, TCS, HCL and many more in the highest gainers list are actually whose beta is normal as compared to the high beta names which run during the market movement such as today’s.
With the slow season hitting us in the next couple of weeks (the US and EU would slow down considerably) we could expect to see some sterile movement of the market and as a consequence drying of volumes and low volatility too. But the question is could this December 2011 be different? Just to refresh our memories, on both recent occasions in the past two years December has brought cheer to the markets contrary to the popular notion that Hedge fund sell and take the vacation with the money. For the Indian markets, December 2009 returned 5.25% and December 2010 returned 6.65% which are excellent gains by any standards. And if the same were to repeat this December too; then it would be heaven sent. It would do two things; close the year out on a positive note, and two and more importantly – lower the YTD or full year losses staring at us down to the extent of the gains during the month.
But whatever, December 2011 does, we should all remember that in equities unless you play for December 2020, there is no point in talking about returns since things change pretty drastically. From profit to loss and vice versa.
As they say, when you are scaling Mt. Everest, you would realize the gravity of the situation only when you scale the peak or are close to it, before that there would be no fun no challenge and no point to talk about how much you climbed.
So until we scale Mt. 12000 or so on the Nifty index, these marginal fluctuations are just worth brushing aside for.
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