The Government managed to pass the FDI in Retail quite comfortably in both houses of the Parliament. So, what is next in line? The markets responded by gaining 0.5 pc for the week. What is next for the markets?
1. The FDI in Retail got cleared thanks to the M & M support. This has further implications then just the retail FDI. The Government can get more reforms passed due to this stability. Mayawati will not withdraw support as it suits her if the elections are held as later as possible. Mulayam has to play along as the givernment can survive even with only Mayawati support. The victory margin in the Rajya Sabha underlined this. 123 to 109.
2. The Parliament is in sessio till December 20th and the Givernmet has made its intetions clearig of pushig for additional reforms like FDI in Insurance till 49 pc and the Banking bill. We also have the RBI policy on the 18th of December and any rate cut can fuel a further rally.
3. The markets have run up and need a small breather before the next leg up. A correction is possible till 5700, 5750 or 5800 levels.
4. The markets follow seasonality and usually top out any time between the months of January and Februrary and I expect the same this year. I treat this rally as an exit opportunity and reduction of my cost price of equity bought throughout the year by part booking of profits.
5. Also, the moves i the past few years have been for about 13-14 months, which coincides with the Jan-Feb period I am talking out.
6. Gilt funds look very attractive with a 1 year horizon. The below are 2 Gilt funds I like:
1. Birla Sunlife Government Securities Fund
2. ICICI Pru Gilt Investments
I expect a return of 12-15 pc in the next 1 year.
7. To summarize I expect a correction till 5700-5750 followed by a rally till 6200 at least. How the markets perform after that remains to be seen.
I definitely expect a major correction in 2013 which will be the buying opportunity for several years to come.
1. The FDI in Retail got cleared thanks to the M & M support. This has further implications then just the retail FDI. The Government can get more reforms passed due to this stability. Mayawati will not withdraw support as it suits her if the elections are held as later as possible. Mulayam has to play along as the givernment can survive even with only Mayawati support. The victory margin in the Rajya Sabha underlined this. 123 to 109.
2. The Parliament is in sessio till December 20th and the Givernmet has made its intetions clearig of pushig for additional reforms like FDI in Insurance till 49 pc and the Banking bill. We also have the RBI policy on the 18th of December and any rate cut can fuel a further rally.
3. The markets have run up and need a small breather before the next leg up. A correction is possible till 5700, 5750 or 5800 levels.
4. The markets follow seasonality and usually top out any time between the months of January and Februrary and I expect the same this year. I treat this rally as an exit opportunity and reduction of my cost price of equity bought throughout the year by part booking of profits.
5. Also, the moves i the past few years have been for about 13-14 months, which coincides with the Jan-Feb period I am talking out.
6. Gilt funds look very attractive with a 1 year horizon. The below are 2 Gilt funds I like:
1. Birla Sunlife Government Securities Fund
2. ICICI Pru Gilt Investments
I expect a return of 12-15 pc in the next 1 year.
7. To summarize I expect a correction till 5700-5750 followed by a rally till 6200 at least. How the markets perform after that remains to be seen.
I definitely expect a major correction in 2013 which will be the buying opportunity for several years to come.
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