Lax leadership… Crisis of confidence

A good leader inspires people to have confidence in the leader, a great leader inspires people to have confidence in themselves.

Leadership is in short supply. Whether it is about tackling corruption and inflation in India, or fiscal troubles in the West, policymakers are increasingly facing a market backlash. In short there appears to be a crisis of confidence on every Street.



Forecast for global growth, including that of India and China are being scaled down to take into account ongoing economic problems. Even at relatively lower levels, risk appetite is lacking; safety remains the primary motive. This trend is unlikely to reverse in a hurry.

Equity indices will tumble at start today, tracking the worldwide slaughter. Volatility has soared and may stay elevated. Those who swear by long-term investing and have the money could do some small purchases. The rest can wait and watch for some confidence that we are not heading into a bear market.

The weakness in the Indian market got accentuated further with the NSE Nifty closing below the key psychological level of 5000. Thursday's selloff will spill over into today's session and a recovery from here hinges largely on a credible rebound in offshore markets. The 38.2% retracement support of the Nifty from the lows of 2008 to 2010 highs remains at 4800. So, there is a chance of a bounce back from that level. However, one must remain extra careful as these are rough times for global markets.

Meanwhile, India’s renowned social leader and anti-corruption crusader Anna Hazare is all set to kick off his delayed fast protest from the Ramlila ground in Delhi. The whole Anna Hazare saga has shown the UPA Government in poor light yet again. A few polls done recently show drop in the UPA's popularity rating. Business-cum-investment sentiment is also down while public anger is on the rise.

UPA II has its task cut out on multiple fronts and it will take some doing to turn the tide back in its favour. There is no threat of the Government losing power though. What the current imbroglio could do is dent the Congress' prospects in upcoming state elections.

FIIs were net sellers of Rs 4.88bn in the cash segment on Thursday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers at Rs 3.3bn on the same day. FIIs were net sellers at Rs 5.60bn (provisional) in the F&O segment.

The foreign funds were net sellers of Rs 4.07bn in the cash segment on Wednesday, according to the final SEBI data. Mutual Funds were net sellers at Rs 330mn on the same day.

Global Data Watch: Germany's PPI data and Canada CPI.