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Wednesday, April 1, 2015

The Summer is Back And it Promises To Be Long

After a dramatic and at times fairytalish equity run on Indian bourses,not that the Dow and S&P were far behind,in which Nifty gained 27%,the CNCMIDCAP gained 51% and the CNX500 was up 34%,its time to wind down the expectations somewhat.

The markets are likely to pause and reflect...On the reforms yet to be undertaken.
On the expected hike in interest rates by the Fed.
On all this qausi religious mix in politics,beef ban etc
On the spreading conflagration in the Middle East

The biggest expectation of 'bigbang' reforms not being met has been mitigated to some respect by the micro vision laid out in this year's budget.Hence the first hald of FY15-16 is likely to be dominated by Power,Infrastructure,Defence and Construction stocks


The second half of FY15-16 will probably belong to Bank and metal stocks.If I were to make a tentative portfolio that could be bought on corrections,it would be as follows:-

BEL
IL&FS Transport
IDFC
HCC
Max India
BlueStar
Whirlpool
Thermax
Dredging Corporation
Tata Power

I am however uncertain as to the events unfolding in the Middle East and the expected repercussion on the Indian economy.Its a difficult subject to quantify but clearly states like Kerala,Andhra that recieve inward remittances from their residents working across Iraq,Saudi Arabia,Libya,Qatar and also Yemen face uncertaintly.As I write,evacuation flights are being organised by Indian authorities to rescue the citizens trapped in Yemen civil war.

Globally the 'lone wolf' attacks are not helping Europe recover from dismal growth and the chances of more political turmoil and war fears is an unsettling thought to take into the new financial year.