Is It The Right Time to Buy?

So, the Indian Stock market continues to fall and it is well below its August 31, 2007 lows. Sensex has fallen well below 15000 mark. Most of the good scrips have reached a mouth-watering level. So is this the right time to accumulate the stocks?

I would say probably not. Although most analysts say the fundamentals of Indian companies are strong in the long run, I beg to differ a bit. Firstly, the high level of inflation will impact the profitability of Indian companies and that is why the market is trying to discount this fact. Secondly, in India general elections are due to be held next year so the present Government will shy away from taking tough decisions. Government will take populist measures only and ultimately the economy will suffer. Lastly, the US and the other Asian markets are also in a bad shape due to rising crude oil prices. Hence there seem to be no way out.

Once the inflation demon is controlled the sanity in the market will be back and the impact of inflation on corporate earnings will become clear. That may be the right time to accumulate the fundamentally sound stocks. Till then stay put.