~~~Market Updates~~~

[Vivasaayi]

hi guys!

it is also said that if the inflation increases -employment increases...how?

[P_R]

hi guys!

it is also said that if the inflation increases -employment increases...how?

Viv, "inflation" is known as"prosperity with blood pressure". Any growing economy will/should have a slight inflation. Deflation is disastraous. Think of it, a general reduction in prices means you can't be paid as much you are receiving now hence you can't afford to buy what you are buying now...and so on...vicious cycle.

More employment, more purchasing power in the hands of people, more demand for goods and services hence price rise - this is the oversimplified explanation. Also because regardless of the rise in purchasing power is immediate when employment increases but the rise in productivity is slow (office-la Hub paakkuravangaLaiyE eduththukkungaLEn :P). Because of this lag the demand will slightly be ahead of supply all the time causing inflation. WHich, to a certain extent is healthy.

Only when the prices are rising, there is incentive to invest more, produce more, hence employ more resources, hence greater employment and so on. But a balance needs to be struck.

Of course hyperinflation means the increase in purchasing power in the hands of the people is not matched in pace in the rise of goods and services. This can happen for a vareity of reasons including poor planning of technology, for-ex crises for economies dependent on imports, monetary crises etc. ellArum inflation-nA direct-A idhai thaan ninaikkuraaanga. But this is only an extreme case.

Of course theories have more complicated spins on this about how market/people/investments react "expecting" a certain relationship between inflation and employment etc. i.e. employment is not related to inflation but expectation about inflation ("reNdum oNNu dhaane dA, kuzhappureengaLE da")

[Vivasaayi]

Only when the prices are rising, there is incentive to invest more, produce more, hence employ more resources, hence greater employment and so on. But a balance needs to be struck.

thanks pr!

i am actually clear abt employment causing inflation - as it increases the money flow.

i just had a doubt on the reverse scenario - the inflation causing the employment and u gave the answer

another kostin!

"is it advisable to invest hugely in shares during high inflation or investing in some real goods like home etc"

[pizzalot]

"is it advisable to invest hugely in shares during high inflation or investing in some real goods like home etc"

Housing can be seen as one of the component leading to measurement of inflation itself. Inflation is the average of price rise of several commodities and services including housing. So it all depends on which of the element was really responsible for the high inflation. If housing was the reason, then investment on housing makes sense. If commodities were the cause, investment on Oil Stocks or produce will make sense.

Am I making sense ?

[sgokulprathap]

Mkts hit upper circuit, will re-open at 10:55 am

Mon, May 18, 2009 at 10:09
Source : moneycontrol.com

The one-sided win for the UPA government (lead by 262 seats) in the 15th Loksabha election, which shrugged off the exit polls results drastically, brought great cheers for the markets in early trade. The benchmark indices locked at upper circuit, and the BSE & NSE are in discussion on extent of trading halt, as the Nifty has already breached second circuit (i.e. 15%).

In the first 30 seconds of trade today, the Sensex surpassed the 13,000 mark, thus hitting upper circuit. This was the first time since October 3, 2008 that the Sensex crossed 13,000 and the Nifty crossed the 4000 level for the first time since October 2008. Huge upsurge of 420 points or 11.4% in the SGX Nifty was suggesting the same trend.

The 50-share NSE Nifty was up 531.65 points or 14.48% at 4,203.30 and the 30-share BSE Sensex surged 1305.97 points or 10.73% to 13,479.39.

The Lok Sabha 2009 election results have given a clear mandate: the Congress-led United Progressive Alliance (UPA) is set to return to power and without support of the Left.

The UPA raced to an early lead ahead of the Bhartiya Janata Party (BJP)-led National Democratic Alliance (NDA). Incumbent Prime Minister Dr Manmohan Singh is now set to continue in the role.

The Indian rupee was trading at 4-month high of 48.40 a US dollar.

On the global front, Asian markets were trading lower barring Taiwan. Nikkei declined 2.5%. Shanghai Composite, Hang Seng and Kospi fell 1.3% each. Straits Times was down 0.79%. However, Taiwan Weighted lost 0.7%.

The dollar fell 0.5 percent to 94.75 yen, nearing a two-month low of 94.55. The shares of export companies are under presssure as a result of strong yen.

[GP]

Markets welcome UPA in a grand manner.

Sensex crossed 14200
Nifty crossed 4300

Almost all the indices were up by 10-15% within the few minutes of trading allowed for the day.

And 'Trading stopped for the day' as the markets touched the upper circuit.

[Anban]

two UCs.. its just better than the best of dreams when u had bought a chuck of calls last week..

[GP]

Can this thread be revived?
any hubbers ready for active participation?

[great]

thought of reviving it GP.

Are you into option or futures?

[rajraj]

Are you into option or futures?

Speculating? Make sure you have certain portion of your investment in stable stocks and savings (CDs). Sometime back my investment advisor warned me that I was investing like a kid ! I am going to reallocate moving money from my company stock to stable funds! The company I worked for also sent me a warning about too much in company stock !