Markets took another punch on the chin Monday. In a knee jerk reaction to Govt's efforts to resume talks on DTAT(Double taxation avoidance treaty)with Mauritius markets took a body blow. Though Govt assured that nothing new is in the offing, selective panic continued Tuesday also. It is unlikely that a decades old treaty with Mauritius will be overhauled in a jiffy. Mauritius surely by this time has enough reasons to recognise India,s need to prevent money laundering. At any rate it is not going to have any material impact on Indian stock markets over the long term.
In a separate development Global rating agency Fitch retained India's sovereign rating at investment grade and sees India having robust growth prospects. Rating given is BBB with stable outlook, denoting a moderate default risk relative to other nations. It projects a GDP growth of 7.7 % for 11-12 as compared to around 8.2% for the previous fiscal. Not bad under the circumstances.
Stock Idea:
Welspun Corp - The steel pipe maker of global repute has shown good relative strength against recent market odds. There is not much down side from the current levels of Rs 155-60. Under favourable market conditions it is expected to reward the investor handsomely.
Glenmark Pharma - The dependable and growth compounder from the pharma sector. FDA approvals and molecule development news keep steadily rejuvenating the stock and consequently its price. Should be an excellent buy at around Rs 300 or so.
Disclosure : I hold both the stocks in my portfolio.
Happy investing
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