Raju Alluri’s Personal Blog

There is a potential way out from the standoff between India’s Government agencies and RIM. Read here and here. A potential interception capability might end the standoff here, but Government agencies getting a “Master key” is a distant possibility.

Slowly, the cashless mediclaim facility seems to be heading for an exit from the market. Late last week, the insurers started backing out from cashless facility in major metros. Now, there is a further blow on insured -  a 10.3% service tax. This tax is going to have a chain effect. First, the newly introduced tax will make the insurers exit out of the cashless mediclaim sooner than later (or they may considerably increase the premiums for cashless claims). It will eventually reduce the patronage of corporate and high quality hospitals. Reason: even if one may get eventual reimbursement, the person might not have cash flow to pay upfront. Also, people will be burdened with the cash balance requirements even with predictable hospitalizations: say, child birth and elective surgery.

This whole change will be an additional burden on employees and senior citizens.

And the moment I wrote about Dow’s stay above 10K, it sinks 1% to close at 9.9K range. Bad!

Markets in Europe are causing ripple effects around the globe. India’s BSE has gone below 16K for the first time in many weeks. Despite all this, Dow Jones in US did an interesting feat. It closed above 10K for 3 consecutive months (since Nov 05th 2009) and that is interesting.

I have a feeling that India’s finance ministry and RBI didn’t capitalize on a golden opportunity. There are feelers of interest hikes and also many of the tax benefits are shown the door. That would have a long term effect on the cash flow into the markets.

The November Y-to-Y sales growth of automobiles in India is impressive.

• Cars: 36.7%
• Two Wheelers: 42.4%
• Overall Vehicle Sales: 45.7%

That is a good growth!

Two days of continuous surge puts Sensex closer to the yearly max. But is there enough good news to sustain it there? The spoilers could be:

• Potential interest rate hikes to negate over stimulation
• Signs of industrial production slowing down in the last couple of months

India, Inc. reported a 7.9% growth in GDP in the September Quarter. This negated the Dubai Fever a bit today.

Dubai fever has hit the markets. Most Asian markets are down anywhere from 1-4% today. How would that impact global economies going forward? For example, are gold prices going to head higher? would Oil go lower? Would real estate go lower?

We need to wait and see.

Sensex has been alternating between positive and negative zones during the week. However, it is well supported at the 16,400 level, a good sign from a statistical standpoint.

During the weekend, the Prime Minister indicated that the stimulus plans will be backed out in the next calendar year. So people anxiously waited how the market sentiment would be. Some people felt that withdrawal is too premature. Others felt that is a positive sign that the economy is heading out of the woods. Looks like the market supported the later school of thought.

We need to see how the next few sessions fare.

India’s Reserve Bank bought 200 tonnes of Gold from IMF. The $6.7B buy might have surprised many. Exactly a decade ago, federal banks across the globe moved away from gold reserves causing the gold to fall heavily. Now the world seems to be moving in the other direction.

The gold prices are hitting the roof time and again. Consumer gold prices have almost doubled in about a couple of years, as far as I can remember. The price of Rs 8300 is frowned upon, in the second half of 2007. Now the prices are hovering around double that figure.