<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>Last week - September 26-30 - was one in which no one knew whether it was coming or going. Yes, there was volatility ahead of the expiry date for September F&O (futures and options) contracts on Thursday. Earlier, traders had gone short following global markets uncertainties, thanks mostly to the European debt crisis, which they had to cover y Thursday. In the first four sessions of the week, the Bombay Stock Exchange (BSE) Sensitive Index (Sensex) rose nearly 3.5 per cent or 536 points. On Friday, shozrt positions were built up again, because of continuing fears of a global crisis and domestic macroeconomic concerns. On Friday the Sensex lost nearly 245 points to end the week at 16,453.76, a gain of 292 points.<br> <br>"A small up move is no major reason for rejoice. The small rally was akin to a relief rally and gives the opportunity for investors with long side positions to exit their long stuck up positions," says Vivek Gupta, CMD at GEPL Capital, a Mumbai-based financial services firm. "Equity investors have become jittery and there is a flight to safer assets due to global and domestic problems." <br> <br>The fear of a double dip recession in the US is back, while at home untamable inflation has brought the Indian economy to a slowdown, dampening market sentiment. Then the government announced an additional Rs 52,800 crore in its market borrowing program, a 13 per cent increase over the numbers announced in this year's annual budget to Rs 4,70,000 crore. That will take the fiscal deficit to 5.3-5.5 per cent from the budgeted 4.6 per cent. "In such a scenario we do not see markets advancing from here and it may test previous lows," says Gupta.<br> <br>There are no positive surprises from the September quarter's corporate performance either; quarterly results will start coming in from the second week of October. Nor is it likely that good news from will act as a trigger for an upward move in the market indices. Gupta, among others, expects markets to move 'sideways'. <br><br>So what should investors do? "Given the current uncertainty in the markets and other asset classes I would park my fund only in fixed income funds for the time being. I would rather sit on the sidelines with 50 per cent cash and invest at the right valuations," says Gupta.</p>