Volatality To Remain Despite Improvement In Market Sentiment!

It is good to see Sensex close above the level of 35,000. I am sure majority of the investors must be enthused by the recent recovery in stock prices. While it is heartening to see the prices rising, I would recommend all those investors sitting on profits to book some profits at these levels as the markets may no t move in one direction (up). Till April- May next year, the markets are going to be volatile and investors may get an opportunity to buy stocks at cheaper rates. Increased volatility is guaranteed, so just remain cautious. 

The steps taken by the government to boost the SME sector in my view are going to be the gamechangers, not only for the SMEs, but also for our economy. Remember, the SME sector is India’s second biggest employing sector. There will be increase in employment and the cost of funds will come down for the SMEs, thus making them more competitive and robust. The 12 measures announced will boost the sentiments for the SMEs and it will have a positive impact on the overall outlook for the economy. Germany is one nation which has a very strong SME sector. The 12 gifts announced this season will go a long way in helping the SMEs grow.

The cover story in this issue talks about the beaten down stocks and how to deal with them. We have shared some very interesting observations in the cover story and I am sure all of you will benefit from our findings. Indeed, most of the lucrative investment opportunities are created when the markets correct sharply. It is in these turbulent times that we need to build a portfolio for the good times, so that we can sell when the market sentiment turns positive.

Markets have been affected negatively by the NBFC crisis. In our special story, we talk extensively about the NBFC sector and the problems faced by the sector. We definitely see a silver lining in the sector and not all is bad with the NBFC sector. There are opportunities in the sector and we have highlighted the positives that investors can focus on. Do give us your feedback if you agree with our observations.

We find that there is lot of good stuff brewing in the passenger vehicle market in India. The special story focuses on passenger vehicle segment and discusses the trend in the automotive industry. Hope you all enjoy reading our analysis and use it appropriately.

The softening crude oil prices and the strengthening Indian rupee are welcome signs for the markets. Also, the rural sector will get a boost as election period is around and those stocks that benefit from the uptick in rural demand may benefit. The results season has been satisfactory and one can expect the next quarter to deliver superior growth in terms of earnings. The government has taken the liquidity problem seriously and is in consultation with the RBI to infuse liquidity among the NBFCs. The easing of liquidity concerns may calm the investors.

Investors ought to hold on to some cash and need not be fully invested as the volatility in the markets may provide ample opportunities to invest at attractive levels.

Stay calm, invest right and build a portfolio for the next three years!

Happy Investing!


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