With hope in their hearts, and with their bets placed down, everyone was looking at volume figures to see if the U-turn is happening. Well the volumes happened, but not the U-turn in price. The Sensex collapsed from 4255 to 4182 in the closing hours, dashing all hopes for the week.

As the game lasted, it would have been difficult for anyone to forecast what exactly would happen. Forget all the talk. Quite often, the market players say one thing to mislead you. In reality they are scheming something else privately in their minds.

If they saw they do not see any recovery, the intention could well be that they want everyone to lose hope and throw in the towel. And as desperation drives, they come in to buy cartloads.

The Indian traders had grown smart to these tricks. It was not without reason that the carry-forward volumes continued to be buoyant. It did not really go down in volume, even as the sign of FII buying refused to surface. On the other hand the selling mood of FIIs had undergone a change. And that would have prompted the punters to hold on for some more.

But unfortunately there were other developments. Sure the Nasdaq index did look up, but that was of no help. The reasons were not far to seek. The Nasdaq looked up because some of the leading scrips that formed the index looked up. But you could not have applied a mirror reflection of that to the Indian market. Here, punters had built in huge position. And if the FIIs held back their purchases, they could break the back of the punters. And all said and done, where was the hurry. Put aside the Nasdaq rise for a moment. Because, the FIIs have no compulsion to mimick that on to the Indian market.

And let us not forget, for the global players, there are other markets which give better opportunities. That the FIIs were cool was indicated by the fact that the currency exchange market did not see any worthwhile inflow of dollars from investors. On the other hand some outflow could be linked to the pressure on the rupee. Does the exchange rate influence FII decision.

Perhaps not. These fund managers usually build in, say around 5 per cent depreciation per annum into their buys. And I believe, RBI has allowed them a facility to hedge their new purchases.

But what about the accumulated purchases, which run well above $10 billion.Well here too the depreciating rupee is not something that cannot be handled. All one needs to do is to sell from your accumulated stock, without bothering about the exchange rate at which the original purchases were made.

The game here is sell the stock and buy it again at lower prices. What you have here is not the strict accounting concept of FIFO or LIFO! With that settled, I tend to believe that the depreciation in the rupee is not a cause per se for abstaining from investing right now. Would be other considerations. With the rupee depreciating the country's foreign rating would have to judged again. Also, one needs to take stock of the trade balance, and the future likely scenario. Not much worry here, it would seem, with software business bringing in a sizeable portion of the earnings. The oil price is expected to soften. And a depreciating rupee would stimulate exports. These are not the only benefits. Even the government of India would end up earning more revenue on he same volume of imports.

And oh, yes, the domestic industry would feel better protected as imports become costlier. Yet one needs to sit down and draw a balance sheet. And so where is the hurry. On the other hand, one needs to concentrate on the possibility of the US Fed raising the interest rate. Some point out that the unemployment figures indicate no need for applying breaks on the economy and fight a potential inflation.But if one scratches beyond the surface and looks into the profile of the unemployed, you get a gut feel that the Fed would get worried. Surely they would not only not be able to curtail import of highly skilled labour like the software engineers. In fact a move is on to licence import of more such engineers.

But US is fighting a battle on the steel import front to protect the job of their steel workers. And similarly there are other educated workers, who are out of jobs for no fault of theirs.

And some of the other figures indicate that the economy is not really slowing down. All this point towards the possibility of Fed considering another interest rate hike.

With that possibility in mind, no fund manager would be in any great hurry to invest his funds. And even without bringing in new funds, it is possible for a fund manger to play the switching game. As one perfects one's skill there is a good return to be earned by this route. If this scenario unfolds, which I think is already on, you have different players in the market playing against each other much more acutely than ever before.

So the basic decision whether you are holding on to a software stock or other FMCG or pharma stocks become an important factor. On the software stocks, the future growth potential is clearly linked to the future trends in the US economy. Sure the players have diversified into Europe, Japan and other countries. Yet there is no denying that US forms a major market.

Ultimately there will be a question mark over the growth over the next two years. And again the comparison between Indian software stocks and tech stocks abroad cannot be made on the same footing. The tech players in US, Europe and Japan are on to high technology products. Not so the Indians. So at another wave length comparison with Nasdaq is again misplaced.

The pharma stocks have seen renewed interest. But do not fail to take notice that growth in most companies are not eye popping. They are about the average. The Indian pharma industry is expected to grow at about 15 per cent per annum.

While pharmas may be good buys, the real gain can come only when the stocks start moving up in a bull run. All this sums up to investing for the future. But with the long term investment strategy being pushed aside by momentum trading strategy, it is difficult to argue that there will be any great rush to invest even here. I suspect people would still prefer to hang on to cash.