Markets At All-Time High Validates India's Growth Story

Equity markets touching record highs almost on a weekly basis is a testament of the strength of the markets. The markets are setting new highs on such regular basis as if it is a non-event. The broad-based equity rally that is pushing the markets higher is led by the banking and mid-cap stocks from the front. I expect the momentum in banking and mid-cap space to continue. Investors should look at some quality PSU bank stocks. There is some value to be found in that space. The global market environment is conducive for a durable rally in equity markets and does not seem to show signs of reversal. While correction is part and parcel of a healthy market, a fall in the markets - a low probability event - will actually present an opportunity to enter.

I understand that investors are worried about market levels and are concerned about the geopolitical situation around the world, especially the intimidatory tactics by China. However, I do not think there will be a war and I will not be giving Chinese intrusions undue attention. 

Indian markets will continue to shine, with the country's GDP projected to grow at 7.5 per cent for FY18. GST and its successful implementation will push Indian GDP on a higher growth trajectory. Its almost 18 days since GST's implementation and so far there have been no major cases of disturbances or disruptions. The government is committed to implementing GST successfully and in six to nine months India will adjust to the new tax regime. 

In fact,the writing was on the wall for us and we said in the month of March — 2017 in Vol.32, Issue number 8 - "Cruising at 29000 and climbing", that Sensex is headed towards 36000. We could see it coming — the all-time highs for Indian markets as the macro-economic indicators have never been better. In the same issue we hinted that Nifty is headed for 11000 levels. 

In this issue, we have presented a unique way of building one's portfolio of investment where one can look at stocks that are the only listed ones in the industry. I am glad to share with you our observations in the cover story on what happens when one constructs a unique portfolio that includes such unique stocks. 

It is observed that the retail investors have a preference for low price stocks when it comes to investing. Well, empirical evidence suggests it may not be a good idea always to look at such low price stocks for outperforming the markets. Read our special report on Low Price vs High Price stock performance and let us know if it has changed the way you think of investing in low price stocks. Also, if you are wondering which stocks to buy in the GST era, we have a suggestion. Why not look at auto sector stocks? Read our topical story to understand how GST is impacting auto sector. 

The corporate earnings will improve in the coming season and investors will be happy to focus on new listings, as in recent times, some of the IPOs have delivered stellar performances on listing. The quality of IPOs that I see these days is really heartening. It was never so easy to make money in the markets. Don't indulge in leveraged trades and those who are not conversant with derivative instruments should go slow on derivatives market.