2.    Industrial Growth: A galloping elephant till recently, India seems to have lost pace and now has become lumbering.  The PM to FM and every spokesperson of the government had long maintained that 8% growth in 2011-12 was etched in stone. Quarter after quarter GDP has plummeted and for July-Sep 2011 it is just 6.9 %. Monthly IIP numbers are not encouraging. Industrial growth for August 2011 was just 4.1 %. The slowdown may put RBI in a tight spot  as far as monetary policy is concerned. A pause in interest rate hike or reserve ratio cut can put some temporary vigour into the market. So for the short term, traders can expect to make some quick gains in rallies. Ride the rallies with caution as overall macroeconomic indicators are a screaming sell.

3.    European Crisis: See-saws surely must have been a European invention. The day by day swings of moods and contradictory information on the European crisis can make the sanest of economists go bonkers. The crisis keeps on unraveling with no end in sight and every day we get the impression that some country or the other is going to default only to be told the next day that things have come on an even keel. It looks as if more and more band-aid will be applied as temporary solution to stave off one crisis after another, only to realise later that the problem has in fact mushroomed.  Any kind of major growth will appear only after 2015 because nobody has a solution other than pumping money into a sinking ship. As the bailout money increases, the Germans and the French already close to recession are going to ask why they should save Italy or Greece or Spain. Then where does the money come from? The US will not lift a finger as elections are fast approaching. Anyway a dead Euro is what the US secretly desires.

4.    Rupee : The Indian Rupee was in the lime light at the beginning of 2011, after a new makeover with its own symbol to show that  it had arrived on the global stage. This currency of a strong nation with over 8% growth when developed nations were thinking 0.8% growth would be great, suddenly found that it was caught unawares in a global quicksand. It lost close to 15% in a few weeks. The biggest gainers are the NRIs. This is the time to bring in as much money into NRE and NRO accounts and draw down your FCNR accounts. You could make a clean 10-15% within the next 6-8 months when the Rupee goes back to Rs. 45 levels. India will be the first to recover once the global economy recovers. Strong countries have equally strong currency. So it is only a matter of time before the Indian Rupee re-establishes its rightful place.

5.    Stock Markets:  The high interest rates coupled with burgeoning costs are eating into corporate profits.  In the second financial quarter [Jul- Sep 11] profits went down by more than 20% even though sales grew at a healthy 22%. The next 2 quarters are going to be even worse. This is going to put downward pressure on equities. The FIIs have become circumspect as doubts have started creeping in if India can reign in fiscal deficit. BBank NPAs have mushroomed, inflation appears to be untameable and the India growth story does not seem so sustainable to many global financial investors. Good investors see opportunities in a temporary slowdown. It is the right time to pick some winners at bargain prices. It should be noted that your picks are likely to yield good returns only in the medium term [1-2 years]. As the market weakens look for winners in beaten down sectors, like Cement, Infrastructure, power, etc.  Pick the leaders in each industry. This is the time to build your portfolio. Do not immediately jump in to buy. Wait and watch and start building your portfolio during strong corrections. Use sharp rallies to sell your holdings and wait for sharp corrections to re-enter. The Stock market will face downward pressure till March 2012. Be patient and be vigilant and you will make a lot of money. India will be the first to recover and FIIs will come flocking in again.