Macro Headwinds continue:
Markets continue to face slew of negative news during the month starting with IIP, GDP growth target, currency, fiscal deficit, govt. backtracking on FDI in Retail, the Lokpal fiasco and a hasty clearance of the Food Security Bill (that aggravates the fiscal pain).
Rate action and policy impetus to be key drivers :
Dec monetary review saw the monetary stance shifting towards addressing growth concerns with RBI indicating reversal in monetary tightening cycle.
Tactical readjustment of polity required to get the structural India story on track. We believe the directional reversal in policy making to be subject to test of political will, on the backdrop of impending state elections is critical for change in the market sentiments.
Valuations offering a solid entry point :
We continue to prefer bottom up stock picking with core beliefs in terms of quality (business, management & cash flows), prudence (cash utilization) and agility (timing and allocation). We prefer to look for businesses with strong franchise value, large consumption compulsion canvass opportunity and penetration potential and remain alert to opportunities that provide tactical returns on Asset plays at attractive valuations and rate sensitive given impending policy response.
Sunday, January 22, 2012
Monday, January 9, 2012
Weekly Overview About Equity Market
Highlights for the week :
• The benchmark Sensex closed higher (up 2.7%) for the week. Mid-cap Index (up 2.4%) and Small cap Index (down 2.8%) marginally under-performed its large cap peers for the week.
• BSE Bankex (up 6.4%), BSE Capital Goods (up 5.9%) and BSE Metals (up 5.2%) were the better performing indices, while BSE FMCG (down 0.1%), BSE Auto (up 0.4%) were the worst performing indices.
• Food inflation entered the negative territory for the first time in nearly six years, raising hopes that the RBI might ease back on lending rates soon. The WPI for food articles plunged to -3.36% as on December 24, on the back of a sharp fall in the price of mass consumption vegetables.
• In a bid to give India Inc respite from possible pressures arising from redemption of FCCB, RBI said eligible borrowers can raise these bonds for up to US$750mn or equivalent per financial year for permissible end-uses.
• Government data shows that STT collections have fallen by over 26% during April-December 2011.
• Exports during November 2011 grew at the slowest pace in two years, registering an increase of just 3.87% over the same month in 2010 to US$22.32bn.
• The benchmark Sensex closed higher (up 2.7%) for the week. Mid-cap Index (up 2.4%) and Small cap Index (down 2.8%) marginally under-performed its large cap peers for the week.
• BSE Bankex (up 6.4%), BSE Capital Goods (up 5.9%) and BSE Metals (up 5.2%) were the better performing indices, while BSE FMCG (down 0.1%), BSE Auto (up 0.4%) were the worst performing indices.
• Food inflation entered the negative territory for the first time in nearly six years, raising hopes that the RBI might ease back on lending rates soon. The WPI for food articles plunged to -3.36% as on December 24, on the back of a sharp fall in the price of mass consumption vegetables.
• In a bid to give India Inc respite from possible pressures arising from redemption of FCCB, RBI said eligible borrowers can raise these bonds for up to US$750mn or equivalent per financial year for permissible end-uses.
• Government data shows that STT collections have fallen by over 26% during April-December 2011.
• Exports during November 2011 grew at the slowest pace in two years, registering an increase of just 3.87% over the same month in 2010 to US$22.32bn.
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