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Tuesday, July 25, 2017

Nifty 10,000:From Here to Where and the China factor?

So the indexes have hit another new high.Since December 2016 its been one way traffic not just in India but globally too.With crude prices hovering at historic lows and the general situation appearing to be better the markets have not found any reason to go down.

Its funny how every time there is a new high the "experts" come out of the woodwork predicting all kinds of numbers in the next 5 years.Everytime.

Yet its been a slow journey to reach new peaks.From 5K in 2007 its taken a decade to double yet during the heady bull run of 2006-07 there was talk of nifty getting to 25000 by 2020.

That dream remains a dream.

I have a feeling that the Indo-China standoff,the Fed and regulatory action by the Indian government will become the reason for some profit taking in August - September 2017.

For long term investors that would be a chance to add some more quality businesses to their portfolio but i fear for those dealing in penny stocks that will once again leave them holding worthless stocks at improbable prices.

Pharma,infrastructure,some Banks,some NBFCs look like continuing the positive trend and the focus once again will shift to quality managements,moats,margins(3Ms).

A level of 9400 -9500 would be a comfortable entry point for those with a longer term view and the inability to not look at prices daily.

Employment generation has been poor,infrastructure development has been poor,the Cow was made the central issue by this government and it might become its achilles heel.

PM Modi is not the maverick everyone thought,he is a dyed in the wool bureacrat who despite his thumping majority believes in the traditional ways and means with policies that are more PR than reality.Disappointing.

Yet India and its economy will continue to grow and with slight management a growth rate of 7-8% should continue.

Xi Xinping the Chinese president is a throwback to medieval princes and I worry about a new belligerent China that has discarded its victim approach and appears set to be a bully in the mould of imperial Japan and Nazi Germany of yore.

"Made in India" has been a complete failure till date and unless the trade imbalance and the growing clout of Chinese companies in the domestic economy is taken care of we might lose the economic war with China before losing militarily,because surely this is war.

Other than Modi there are no leaders in India,only cattle.

Hence there is no plethora of ideas just the ONE way.Sad to say.

Yet the inherent energy of India and its people will prevail.A lot needs to be done and that is where opportunity lies.In building roads,ports,heavy industry and human values!