by Mr. Alex Mathews, Geojit BNP Paribas
Nifty made an all time high at 7808.85 on Tuesday and the markets started
correcting from there on. The extreme
short term indicators of the Nifty are in the overbought zone, caused the
technical related sell-off.
In coming days markets may remain cautious and it may try to find support
at 7425-7400 levels and may consolidate around these levels. After this technical correction, markets may
bounce back towards 8000 levels in the near term. The ongoing technical correction can be
utilized to buy stocks especially for the investors those missed the bus
earlier.
The latest report suggests that Indian equities valuations are much higher
than MSCI emerging market index which is at around 11.1 against Nifty’s 15.4
poses concerns of a correction.
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| Alex Mathews, Geojit BNP Paribas |
Various budget proposals which unveiled yesterday can spur economic growth
of our country and in the medium term our GDP growth rate can move above 8%, if
the reforms pace to continue.
The budget was above expectation, giving more emphasis to infrastructure
and reality sectors, which indirectly spur the demand for cement, steel, demand
for vehicles, metals and will create huge amount of job opportunities directly
and indirectly.
FM announces Namami Ganga; an integrated Ganga Development Projects Rs.2037
crore set aside for this, on completion of this project, it can attract
tourists. The introduction of E-visas
can attract tourists from various countries
Like Infrastructure, FM also announced various initiatives to boost power
generation and he also laid plans to construct Ultra Mega Solar Power Projects
in the states of Rajasthan, Gujarat, Tamil Nadu and Jammu and Kashmir.
The finance minister targets 4.1% fiscal deficit of the GDP for the year
ended March 2015, but he is not mentioned the ways by which he wishes to
mobilize the required amount.
Infosys on Friday unveiled its results, which was better than street
expectations will keep the IT stocks in the front seat in the next week,
Defensive sectors like Pharma and FMCG sector stocks will try to keep the market
momentum upward, on the other hand old economy stocks may face minor correction
in the days to come.
Mid-cap and Small Cap stocks are also showing technical correction, so it
is advisable to buy good quality stocks in the near term. Companies which are in the field of mid-cap
IT, Pharma and FMCG can be bought at these days.
European and American markets earlier were giving supports to our markets,
but are weak now especially after the U.S Fed indicated that it may increase
the interest rate. The latest crisis of
Portugal’s bank Espirito Santo International SA, will spread concerns about its
accounting standards as the parent missed some debt payments.
Due to this crisis, Portugal’s government bond yield has spurted further
worsening the crisis which will have minor impact on emerging markets like
India.
About the author..
Mr. Alex Mathews is Head (Research) at Geojit BNP Paribas
For Media Contact
Shilpa
T: + 91 22 2288 4046, + 91 22 2288 4048, + 91 22 2288 4049 |
E- mail:shilpa.suryawanshi@pranapr.com
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