The Indian corporate sector has been posting a strong topline and profit growth for sever-al quarters on the back of a strong demand. In the last few months, com-modity prices have been on the rise, which has resulted into higher raw material cost for most companies. This is likely to have an impact on the mar-gins. However, the continuation of a good demand and relatively higher inflation figures would ensure that sales growth would continue to be good. The services sector is also likely to perform well, both in terms of the topline and bottomline.

The impact of the tsunami and the resultant havoc on the infrastruc-ture facilities in Japan, including their nuclear power plants, has left a deep impact on the regional trade balances. Japan being one of the significant sup-pliers of ancillaries to OEMs across the world, particularly in the automobile sector, and auto sector being the lead sector for any economy, supply dis-ruptions could mean lower outputs for vehicles, thereby adversely affect-ing many other industries. However, Japan’s competitors could have a field day and they are likely to increase their production, which may result in overall lower economic impact. It could also result in a reduction of discounts on the prices of vehicles, thereby increasing the profits in a short time span.

The Libyan issue is more structural in nature. Over the last 25 years, crude has been the focal point of global politics and particularly important for the western world. The intrusions and conflicts among various countries over the past two decades have had their genesis in ‘control of oil’. While the Libyan crisis has already peaked, more important would be to watch the developments in other countries like Yemen and Saudi Arabia, where the problem has been simmering. It is not surprising that this time it is civil unrest that has been made the tool. Unfortunately, such events have made the speculators go overboard, resulting in artificially high prices. 

The economy is likely to post a strong growth of about eight per cent in the current financial year. This would be contributed by all the three major segments: agriculture, manufac-ture and services. This would mean that most of the sectors would show good performance in the next couple of quarters. However, since interest rates are on the rise, sectors like NBFCs etc, which are interest rate-sensitive, may suffer some adverse impact.

I feel that good credit off take figures and a normal monsoon could bring a positive cheer to the market. On the other hand, any further increase in crude prices or continuation of political uncertainty could mean negative triggers.

The volatility in the stock market has increased in the last 12 months. Since the Indian economy is on a sound structural footing, the market conditions would continue to remain conducive to investment. I will advise retail investors in the current market scenario to choose an SIP to achieve their investment goals. The funds that are proxy to GDP growth and infrastructural boom may be useful for investments in the current scenario.