ACCUMULATE AT EVERY DIP

Meanwhile, the government has been able to pass few bills such as insurance bill, coal mines bill in both houses of parliament. However, the government is facing problems to pass some of key bills such as Land Acquisition and GST bills. These events too acted as negative sentiments for the markets in the absence of macro triggers. On a positive front, the Reserve Bank of India (RBI) announced some relaxation in provisioning rules against bad loans. However, RBI has cut down banks’ corporate exposure limit to reduce risks in banking sector. On macro front, the core sector output growth numbers came to four month low of 1.4 per cent for the month of February. These core sectors predominantly includes coal, crude oil, oil refining, natural gas, steel, cement, electricity and fertilisers and these sectors collectively accounts for 37.9 per cent of India's industrial output. There were mixed bag sentiments from domestic cues over last couple of weeks.

On global front, the oil prices showed some cooling after five per cent spike after Saudi Arabia and a coalition of Gulf region launched strikes in Yemen to counter attack rebels backed by Iran. Further, the cooling of oil prices exaggerated as Iran and six world powers are expected to close nuclear deal and the event is expected to further increase in oil supply. Meanwhile, the Chinese market torched its seven year high on hopes of more stimulus and infrastructural spending by Chinese government. The overall bounce back seen across major world markets, however, the investors seems to be taking out profits across all major world markets.

The domestic markets closed financial year 2014-15 with almost 25 per cent gains on frontline indices. Last year, the domestic equity market has been firing on all cylinders, though some correction was witnessed in last month of FY15 due to concerns over corporate earnings and speed of Government’s reform implementation. The Indian growth story is still intact and poised to touch new highs in coming financial year. With the significant correction in first quarter of CY2015, there is limited down side for domestic markets in coming financial year. The domestic market is expected to show volatile movement over domestic and global cues. Hence accumulating stocks on every dip seems to be prudent strategy in days to come and the same strategy has been implemented by both domestic and foreign institutional investors who bought Rs 749 crore and Rs 2662 crore equity respectively during last couple of weeks when the broader market has corrected more than two per cent during the same period.