Well some say that the Indian markets are all set to mother of all the bull markets and from here there is no looking back. While others say that we are currently in a kind of over bought zone and a correction of at least 200-300 points in the Nifty index is definitely warranted.
While, what i see this is as the events holds the key to this. In the month of April there are three very important news flow that will shape the directions for markets:
- The Q4FY10 earnings of India Inc.
- Indian WPI for the month of March
- RBI's Q4 credit policy release on 20th April
While inflation is a cause of concern, given the way the food price and other key individual indices are behaving, this will also have a major impact on RBI's Q4 policy guideline. I believe that there is a strong possibility of at least a 50 bps hike in the key policy rates. This I believe could be a problem story for the ever singing markets of ours.
On the other hand the corporate India is expected to show decent Q4 numbers, however much of this growth I believe is already factored into the stock prices and hence there is nothing much left on the table that should excite the investors. Infosys Q4 results tomorrow morning will set the stage for the rest of India Inc.
Hence, I strongly believe that instead of chasing the markets at a broader level, it makes sense to invest in good stocks with reasonable valuations.
As Mr. Lynch Says
"Often, there is no correlation between the success of a company's operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies." - Peter Lynch
Happy Investing...!!
i see a definite correction in the global equity markets not only india....specially with US volatility index trading at the highs of 30.
ReplyDeleteand the 2nd reason might be the effect of poor monssons last year..the effect of whc is alwaz seen in the preciding year in indian economy.
Dear Sir,
ReplyDeleteI agree with you as specific stocks are still showing upward movement even though market is negative (yesterday and today as of now).
Also, I was expecting a major correction due to the clash of the titans (SEBI and IRDA)on the issue of banning ulips as 70 to 80% investment by insurance companies in stock market comes from ulips.But market did not show much correction yesterday.According to me,market might be waiting for any major move towards execution of this ban.Because implementation of this kind of move would be difficult as so many retail investors have invested in ulips to secure their future earnings. Regulators would also consider that while executing.
So, till that market would remain range bound, according to me.
What is your view on this, sir?
nice observation read above one important observation even after a very good Q2 and Q3 results we had a major correction of about 500 points in nifty as the results starts coming out .
ReplyDeletethis time it is annual results that will be announced as well as Q4 results. its a sign of caution in the present month and the month ahead.
be ware of the events.