India has just concluded a historic election. It has broken away from the grip of the Nehru - Gandhi family, which has ruled India for nearly six decades after it became a free democratic country in 1947. Narendra Modi of the Bharatiya Janata Party led the largest democracy in the world to a landslide victory attaining a majority on it's own, and creating a record..
Though a comfortable win by Mr Modi was getting factored in, the extent of the win got many analysts by surprise. On counting day, as results started pouring in stock markets went into a tizzy. BSE Sensex opened with a gap, reached an intraday high of 25375 - a gain of 6% from previous day's close. Such stratospheric levels saw immediate profit booking and closed the day at 24120 - a lifetime time .
Both domestic as well as international investors are highly bullish on India now as they view the new dispensation as pro growth and having the ability to deliver. Foreign investors have already pumped in large amount of money and are continuing. Looks like a long long bull market in on..
So what is to be done . As I mentioned in my earlier post, those who are invested should hold on . For those who want to enter can wait for some time . By such time contours of the new government formation will be clear and we will start getting a perspective on the govt's priorities. Technically also stocks are almost at overbought levels. Market may not correct much from here. At best it may be side wise for a while before it starts rising again. Those with a little bit of appetite for risk can start to buy slowly.
Buyers are giving IT and pharma stocks a pass at present as most expect the rupee to appreciate and hence lower the earnings of these sectors. But, like the stock market the currency market also has factored in a Modi govt. and hence any further appreciation will be limited. With a bull market in place valuations of these sectors are bound to go up. Hence these are good contra buys at this juncture.. It is better to stay with leader like TCS and Infosys.
Disclosure: I intend buying these stocks.
Until my next then
Happy investing
Basudev
Though a comfortable win by Mr Modi was getting factored in, the extent of the win got many analysts by surprise. On counting day, as results started pouring in stock markets went into a tizzy. BSE Sensex opened with a gap, reached an intraday high of 25375 - a gain of 6% from previous day's close. Such stratospheric levels saw immediate profit booking and closed the day at 24120 - a lifetime time .
Both domestic as well as international investors are highly bullish on India now as they view the new dispensation as pro growth and having the ability to deliver. Foreign investors have already pumped in large amount of money and are continuing. Looks like a long long bull market in on..
So what is to be done . As I mentioned in my earlier post, those who are invested should hold on . For those who want to enter can wait for some time . By such time contours of the new government formation will be clear and we will start getting a perspective on the govt's priorities. Technically also stocks are almost at overbought levels. Market may not correct much from here. At best it may be side wise for a while before it starts rising again. Those with a little bit of appetite for risk can start to buy slowly.
Buyers are giving IT and pharma stocks a pass at present as most expect the rupee to appreciate and hence lower the earnings of these sectors. But, like the stock market the currency market also has factored in a Modi govt. and hence any further appreciation will be limited. With a bull market in place valuations of these sectors are bound to go up. Hence these are good contra buys at this juncture.. It is better to stay with leader like TCS and Infosys.
Disclosure: I intend buying these stocks.
Until my next then
Happy investing
Basudev
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