Panic Selling: Over-Reaction?

Previously, I have said a 30% correction would put India's market in a fair to under-valued position. At 10 times earnings Nifty would be 2550...as the global risk profile continues to rise and capital dwindles, to attract our share of capital we will have to offer higher returns.

However, this correction is unlikely to be the straight down road currently being charted; the bumps will be legion. Todays sharp meltdown on top of the past few days is an over-reaction and without doubt further fueled by margin call selling. There is likely to be just as sharp a recovery of 8 to 10% before the next selling wave starts.

We will now see co-ordinated rate cuts by all the central banks around the world; inflation is better than complete collapse. Expect interest rates in India to decline by 3 to 4% over the next year, starting this month.

There is only one thing to do..exercise, eat right and keep your health in good shape....wealth is already at risk.