DSIJ Mindshare

Make Most Of The Markets Now

Equity markets in India is now gripped in a state of intense excitement since the ruling party in the Centre, BJP’s massive victory over its political foes in the state of Uttar Pradesh where it simply voted out the ruling Samajwadi Party, its coalition partner, Congress and arch rival, Bahujan Samaj Party. A bullish feelings has engulfed the Dalal Street at the time of writing this note of editorial for our valued reader-investors.

The UP, Uttarakhand elections outcome has simply stamped Narendra Modi’s authority on Indian politics and raises further expectations of fast tracking the ongoing reform process in India which will definitely put the fastest growing economy in the world on an even faster growth trajectory. A big state like UP can now join the growth story of India and can be expected to contribute almost 1% to the India’s GDP growth on its own in coming years. The ‘New India’ as coined and promised by the Prime Minister looks more of a reality now, after BJP increasing its market share so to speak which will also help build investors’ confidence. The list of investors include the ones even from foreign nations.

Markets, while trading with a feel-good factor from the UP-election results, will soon start focusing on the upcoming earning season, starting in the month of April. The earnings season in the coming quarter is expected to be better this time around with expectation of minimal impact of demonetisation. On global front the developments have been extremely conducive for the global financial markets even as the markets have startedthe factoring in another rate hike in the month of June, by the US Fed. Crude Oil prices can also be expected to remain benign and will be closely watched by the investors.

Infrastructure spending is in full swing in India and is expected to improve the employment numbers. Investors are well advised to focus on infrastructure sector, finance & banking sector and pharma sector while building a long-term portfolio. IT sector, however obvious it may sound, can be avoided at this juncture. Usually there is heightened volatility in the markets when markets are trading close to their highs or are trading at higher levels.

It is extremely interesting to observe the volatility is missing or at least reduced as indicated by VIX, even at these higher levels for the markets both in India and global developed markets. In case you are wondering why we are bullish on markets in long run and what could be the key triggers for the markets going ahead, suggest you go through our cover story which talks about interesting forward looking estimates on markets.

We strongly believe markets may go up by 20 per cent from this point during the coming 12 months, unless something highly earth-shattering takes place. At the time of writing this piece, the global and local factors are friendly in nature for the markets in our country, there is enough political stability, things across the border sharing hostile nations are not looking that bad and there are all the reasons to feel happy, euphoric. 

Summer has finally reached, well, almost. While staying financially healthy, it is also necessary to stay healthy physically especially in these days of change of season. Stay healthy, stay tuned to your favourite investment fortnightly and write us back whenever you feel something more needs to be done by us towards your cause to become a wiser investor.

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