Today I bought some more of Aban at 3300. Also I had bought Nifty July 5000 call options on Friday. With the kind of inflation (11%) that is there in India and the chances of a policy error high, it is not right to be a bull on India. But then, nothing ever goes down in a straight line. These are all trading positions with a fair chance of losing capital.
The most significant event of this week is the Fed Reserve meeting. Bond yields had risen sharply in the last three weeks on anti-inflation rhetoric from the Fed earlier this month. They have eased a bit in the last week as Fed suddenly turned soft again. WSJ rightly says that Bernanke is squandering his most valuable commodity - his credibility. It will be interesting to see the post-meeting statement, and how it deals with inflation.
Can the Federal Reserve trade work again? Remember Jan 22 and March 18, when markets were falling before Fed met, only to reverse course later. Yes there are no more interest rate cuts coming. But the Fed's statement carries a lot of power. No harm betting that it will stabilize the currently falling equity markets.
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