Results so far has been a mixed bag. Overly leveraged companies continue to struggle to keep afloat. Tech stocks barring a few, took a beating post results. Midsize infrastructure companies in addition to their debt woes are also having to cope with lack of worthwhile investment in the sector. Autos have their own woes in a high inflation low growth scenario. Banking sector has done well, again barring a few which have not been aggressive enough.. Consumption story has given a real surprise this time. Most FMCG companies have posted decent enough results.
So, nonperformance has been punished by market while companies that met or exceeded expectations have seen their stocks soar. This is normally the case and it should be possible to take a call from here. But things don't seem to be easy this time around.. Indices have made a vertical run in the month of April.. Sensex rose by 8.6% while Nifty logged 9%. Technical charts are now stretching in the overbought territory. Dow and the S&P 500 have had a big run so far reaching all time highs. Can we remain behind? Looks like FIIs are in again.
There is reason too for the FII inflows. Anytime there is gush of liquidity in the US, it finds deployment in markets around the globe and we too get our share of allocation. Also it appears Benanke is in no mood to let go any time soon. He is determined to inject liquidity till American economy is truly out of the woods. But whether he will succeed is another matter. There are many who feel American economy will not recover any time soon and the present euphoria is a bubble waiting to bust. About this, I will write in a subsequent post..
So what is to be done now. As I mentioned earlier markets are overstretching. Inflation will take its own time to climb down. Particularly the food inflation. Banks have not and are in no mood to reduce interest rates , though RBI has reduced rates on several occassions. More so they want a further CRR cut, meaning more cash in the coffers.
In such a scenario it is a tall order for markets to gain further traction. Though Bulls will try to replicate Dow and S&P - lifetime highs for Sensex and Nifty i.e.. May be FII flows could help them. And the flip side is that any deepening of the political uncertainty will dash all hopes of the bulls.
Best is to book profits and earn bank interest till markets correct. I have sold L&T lock stock and barrel..
More in my next including stock ideas.
Until then. Happy investing.
Basudev
.
So, nonperformance has been punished by market while companies that met or exceeded expectations have seen their stocks soar. This is normally the case and it should be possible to take a call from here. But things don't seem to be easy this time around.. Indices have made a vertical run in the month of April.. Sensex rose by 8.6% while Nifty logged 9%. Technical charts are now stretching in the overbought territory. Dow and the S&P 500 have had a big run so far reaching all time highs. Can we remain behind? Looks like FIIs are in again.
There is reason too for the FII inflows. Anytime there is gush of liquidity in the US, it finds deployment in markets around the globe and we too get our share of allocation. Also it appears Benanke is in no mood to let go any time soon. He is determined to inject liquidity till American economy is truly out of the woods. But whether he will succeed is another matter. There are many who feel American economy will not recover any time soon and the present euphoria is a bubble waiting to bust. About this, I will write in a subsequent post..
So what is to be done now. As I mentioned earlier markets are overstretching. Inflation will take its own time to climb down. Particularly the food inflation. Banks have not and are in no mood to reduce interest rates , though RBI has reduced rates on several occassions. More so they want a further CRR cut, meaning more cash in the coffers.
In such a scenario it is a tall order for markets to gain further traction. Though Bulls will try to replicate Dow and S&P - lifetime highs for Sensex and Nifty i.e.. May be FII flows could help them. And the flip side is that any deepening of the political uncertainty will dash all hopes of the bulls.
Best is to book profits and earn bank interest till markets correct. I have sold L&T lock stock and barrel..
More in my next including stock ideas.
Until then. Happy investing.
Basudev
.
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