The markets tanked on Friday, dragging the markets down 1.6 pc for the week.Let us have a look at a few of the triggers which could influence the markets in the coming weeks.
Positives:
1. Crude oil prices tanked on a global slowdown. Brent crude was trading at 98 dollars to a barrel down from the peak of 125 dollars in March. These should ease the Government subsidy burden.
2. The Petrol price hike means the Government finally wants to take some action on the Reform front. If more such reforms come through, then expect a rally.
3. The FIIs are not pulling out big time. There are sporadic bouts of selling which are getting absorbed by the markets.
4. Many stocks are trading higher than they were when last time the markets tested 4800 odd levels. Reliance is a major drag on the markets.
Negatives:
1. The Global investment climate is getting worse. World markets are tanking and we cannot be immune to a global slowdown.
2. The GDP growth has come down to a 10 year low of 5.3% for the last quarter of FY 2012. There will be downgrades if the situation persists.
3. Government needs to take steps to sort out the Telecom mess. Fresh auctions, reserve price for the auction all need to be sorted.
Key Events:
1. The Greece elections on June 17 and whether they remain i the Euro will be key trigger for the markets. That will decide whether we test 4300 or 5600.
2. Spanish default looms large. How this event is handled will decide the course of action.
Course of Action:
Many stocks are trading at a dividend yield of 5 %. The dividends are due in about a month's time. 1 way of looking at it is over next 13 months, one will receive about 10 pc returns as dividends only givnig a fair margin of safety. I would like to buy such stocks identified by me and Lakshmi.
Buying at 4750-4800 levels which are strong areas of support, these dividend yield stocks gives a very good margin of safety.
Positives:
1. Crude oil prices tanked on a global slowdown. Brent crude was trading at 98 dollars to a barrel down from the peak of 125 dollars in March. These should ease the Government subsidy burden.
2. The Petrol price hike means the Government finally wants to take some action on the Reform front. If more such reforms come through, then expect a rally.
3. The FIIs are not pulling out big time. There are sporadic bouts of selling which are getting absorbed by the markets.
4. Many stocks are trading higher than they were when last time the markets tested 4800 odd levels. Reliance is a major drag on the markets.
Negatives:
1. The Global investment climate is getting worse. World markets are tanking and we cannot be immune to a global slowdown.
2. The GDP growth has come down to a 10 year low of 5.3% for the last quarter of FY 2012. There will be downgrades if the situation persists.
3. Government needs to take steps to sort out the Telecom mess. Fresh auctions, reserve price for the auction all need to be sorted.
Key Events:
1. The Greece elections on June 17 and whether they remain i the Euro will be key trigger for the markets. That will decide whether we test 4300 or 5600.
2. Spanish default looms large. How this event is handled will decide the course of action.
Course of Action:
Many stocks are trading at a dividend yield of 5 %. The dividends are due in about a month's time. 1 way of looking at it is over next 13 months, one will receive about 10 pc returns as dividends only givnig a fair margin of safety. I would like to buy such stocks identified by me and Lakshmi.
Buying at 4750-4800 levels which are strong areas of support, these dividend yield stocks gives a very good margin of safety.
No comments:
Post a Comment