For long term investor the Indian stock market has provided no incentive to invest in the market. If the Sensex of BSE is taken as indicator of the stock market performance Indian stock market, then it is crystal clear that the stock market has no incentive to invest as the Sensex has been in the same range since months. First of all the index rises 1000 to 1500 points then the falls by 1000 to 1500 points in few trading days. Again in few trading days the market rises by same 1000 to 1500 points and again falls by the same. This has been continuing since long and it is expected that the same will continue for even longer time.
The IMF report regarding the expected economic problems in the Euro region and the expected slowdown in the US economy in the response of the Euro problems will have huge impact on the developing economies like India and China. So the confidence of the international investors is again on negative side of the business.
It is well known that the Indian stock market has huge international institutional investor’s participation and the expected slowdown in the Euro zone and the US will result into outflow of foreign money from the Indian stock as the trends show that in times of problems the foreign money has been gone to those countries from Indian markets. So this will have huge impact on the stock market.
Also the current industrial growth in Indian businesses has fallen in comparison to the previous periods. And Indian economy is going through very high inflation and this inflation is structural problem and the government has been doing almost nothing to contain this inflation besides the monetary policy changes. So in near future there is no solution to the inflation problem. These situations will have negative impact on the investments in the stock market.
What investor should do?
It is imperative for one to must have an investment plan. There are two types of investors; one those who are naive investors and invest for medium to long term and those who are very much familiar and expert in investing and invest for short term. For the naive investors it is time to leave the market as and when the timing is right and for the experts one who invest for the short term, this is one of the golden period to invest into. This will provide huge opportunities to earning some good money. But the long term investors should avoid investing into this market. Regarding investment please read Take Care of These Rules before You Invest