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The Driving Forces

| 12/13/2012 9:00 PM Thursday

There have been various factors that have been pushing up the market for almost two and a half months now, primarily the government’s actions on the policy front. Shailendra Lotlikar and Prasanna Bidkar take you through some of the driving forces which will keep the overall market in a bullish frame and help some key sectors go higher.

For over six months now, we have  been talking about how the overall economic landscape and the investment climate are set to improve. Our belief in the inherent strength of the Indian economy and conviction in the Indian markets stems from our strong research capability and experience of more than 27 years. This has helped us identify the bottom of the market for you and guide you through some of the roughest phases and emerge unscathed.

Investment gains, particularly in equity, are all about right timing. One wrongly timed decision can lead to enormous wealth erosion, while a small investment at an opportune time can bring in reasonably good profits. It pays to identify the right triggers for the market, whether positive or negative. These very triggers define the success or failure of investment decisions.

Readers of Dalal Street Investment Journal would certainly appreciate the fact that we were first ones to have called the market bottom. We would like to reproduce below the sequence in which we have systematically guided our readers over the past six months. Whether it was reminding the Prime Minister that it was time to act (DSIJ Vol. 27 Issue No. 13, dated 17th June, 2012) or it was the spotting of the silver lining to the dark clouds, (DSIJ Vol. 27 Issue No. 15, dated 15th July, 2012), we have been very forcefully reiterating our experience of reading the markets correctly time and again. “The fundamental strength of the Indian economy has reflected well in the growth numbers that we have cl

After providing ample reasons as to why we thought the Indian economy was well placed in getting past through all the negatives and believed that all that spelled doom was about to vanish (DSIJ Vol. 27 Issue No. 18, dated 26th August, 2012), we went all out to raise that one important question on everyone’s mind – ‘Has The Bull Run Begun?’ We even took an in-depth look at whether the Bull Run has really begun (DSIJ Vol. 27 Issue No. 20, dated 23rd September, 2012). Our optimism and foresight are reflecting well in the way things have shaped up since then. Whether it was about the impending bull run or about how reforms were to drive the markets going forward, our teams have been instrumental in keeping our readers well informed much in advance on what to expect and how to profit from what is coming. Having said that all is well and the only way for the markets forward was on the upside, we are sure readers would want to know what are the factors that will push the markets up.ocked until a couple of years ago. How can any economy which has been on such a sound growth path suddenly find itself struggling to get even its basic parameters right? Is the situation so bad as to warrant so much of pessimism? We, at Dalal Street Investment Journal, do not think so...” is what we said then.

While our macro view on the economy and the markets continues to remain bullish, here are what we think the primary drivers for the markets over the near future will be. The most important factor that will drive growth and in turn the markets is government spending. Government spending has always been that one critical element that spurs growth. Having managed to get past the hurdles in taking the

 reforms process forward, the government is likely to train its guns towards helping boost the economic growth rates further. Of course, while it will make it look like an attempt to better the economic performance, more of the efforts will be directed towards calling the attention of the electorate in preparedness for the general elections due in 2014. Let’s take a look at what is lined up over the near future and the likely impact.

 

Find More Articles on: DSIJ Magazine, Cover Story, Economy, Stock Recommendations, Fundamental Picks, Product, Large Cap, Mid Cap, PSU

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