From Press to President

By Mohit Satyanand

15 September 09

From Press to President - the state of financial markets one year after Lehman was the object of
much discourse over the last 24 hours. The markets themselves were rather quiet on all fronts -
foreign exchange, bullion and equity.

The dollar traded down some (again), the Dow traded up some (again), and gold held steady just
above 1,000 dollars per ounce. Again, yes, but only for the second time this year. In fact, even
though gold closed above a ton once earlier, in March 2008, that was a one-night stand.

Indian equities were a little weak, both in price levels, and in volume. It looks like some fresh
stimulus will be required - whether to kick them into higher orbit, or down a ramp. With two weeks
left for the current quarter to end, I guess market players will be looking for cues on earnings
numbers.

Over the last ten days, a sector that seems to have taken a definite turn south is real estate. The
BSE sector index is down to 4213, from its peak of 4592. DLF, the market leader, has lost a
significant 10%, and closed yesterday's trading at 392, off from its peak of 435 a week ago.

Auto stocks, in contrast, are riding high, up 57% over the last twelve months, and close to their
peak. On aggregate, the sector commands a price-earnings ratio of 23.6, which is a little steep. In
addition, the ban on purchase of new vehicles by government departments (other than by
defence forces or the police) should have a mildly dampening effect on auto share prices.

Early trades in Asia suggest a quiet day ahead.