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Thursday, April 19, 2012

Equities in April:The Monsoon prediction...

It was interesting to read Mr Mahindra's tweet about India where we join the ICBM club by successfully testing a missile with 5,000 Kms range and our railways leaves 3 dead in Mumbai due to a faulty tower placed dangerously close to the tracks,all in the same day!

That sums up the contrasts that make this country interesting and a hugely difficult read for many analyts even today.The markets have been relatively flat and not reacted to global news.Some of my analyst friends say that the Nifty might mirror the fate of the rereleased 'Titanic'but I am yet to come round to that view.Greece may need another bailout and Italy bond yields have gone back to the 8% levels so a fresh,immediate crisis seems unlikely.The growth in US markets,although stilted is still above worst case projections.No fresh Euro nations look to be in serious trouble.

For this month I would again buy on any dips unless the 4900-5000 levels are violated on a closing basis on the Nifty.

In fact,I see some re-awakening of interest in riskier assets across the globe.I continue to be bullish on Indian real estate and those with slighlty conservative habits might be interested to invest in Hindusthan Unilever or other consumption stories.I feel tempted to risk investing in KRBL(biggest Indian basmati rice exporter),some power producers like Powergrid,NHPC,REC or even Areva.

Even this year is likely to be a stock picker's market.I bet on Kingfisher airlines hanging in there at a price of Rs 16 and in One month its moved to 10-20 levels.With the passenger traffic growing close to 23% YoY basis and some downshift in jetfuel prices I would be tempted to hold this for a couple of years.

There are many interesting stocks like this in the market right now.If the Met's prediction of a normal Monsoon holds,if my prediction of some cooling in commodity prices worldwide holds THEN Indian equities will once again outperform the global indices...!!