The markets had a free fall in the last week losing about 3.8 pc. There seems to be despondency all around. Is it really all gloom and doom as portrayed? This week let us step back and look at the next 1 year.
1. The elections can be held latest by April 2014. There are 3 windows right now, September 2013, December 2013 or April 2014. The most likely option looks to be December or April. The reason for this being is that the logistics demand at least 3 months post the the Government falls. June-September is the Monsoon season in India.
2. For all the posturing no one is ready for elections just as yet. Mayawati is waiting for the Samajwadi to mess up further, the Left front is waiting for Mamata to become more unpopular, the BJP is still to decide who will lead them and are waiting for UPA to become more unpopular.
3. The complex Mathematics will keep the Government aflloat. This coupled with the Congress track record of always completing their term may well lead to the elections being held 1 year ahead.
4. The next trigger will be the full year corporate earnings which will come around the 15th of April. Till then, there are no major events lined up. Cyprus should be settled today and if that happens the markets should rally up.
5. The year end NAV game will start in earnest from Monday. The Fund Manager bonuses are paid based on the March end NAV values. Hence, I believe at least the large caps should rally in the next week.
6. Many book losses in March to offset short term capital gains against losses. This is to pay less income tax. This could also lead to midcaps being further hammered.
7. Logic suggests that markets should rally before elections so that the funds are available to fight the elections. One of my good friend has carried out a study about pre-election year performance and almost always there has been a 20 pc gain in the markets.
8. Technically, the markets should bounce. 5950 is the key level. Any move beyond 6000 and we still may see new highs.
1. The elections can be held latest by April 2014. There are 3 windows right now, September 2013, December 2013 or April 2014. The most likely option looks to be December or April. The reason for this being is that the logistics demand at least 3 months post the the Government falls. June-September is the Monsoon season in India.
2. For all the posturing no one is ready for elections just as yet. Mayawati is waiting for the Samajwadi to mess up further, the Left front is waiting for Mamata to become more unpopular, the BJP is still to decide who will lead them and are waiting for UPA to become more unpopular.
3. The complex Mathematics will keep the Government aflloat. This coupled with the Congress track record of always completing their term may well lead to the elections being held 1 year ahead.
4. The next trigger will be the full year corporate earnings which will come around the 15th of April. Till then, there are no major events lined up. Cyprus should be settled today and if that happens the markets should rally up.
5. The year end NAV game will start in earnest from Monday. The Fund Manager bonuses are paid based on the March end NAV values. Hence, I believe at least the large caps should rally in the next week.
6. Many book losses in March to offset short term capital gains against losses. This is to pay less income tax. This could also lead to midcaps being further hammered.
7. Logic suggests that markets should rally before elections so that the funds are available to fight the elections. One of my good friend has carried out a study about pre-election year performance and almost always there has been a 20 pc gain in the markets.
8. Technically, the markets should bounce. 5950 is the key level. Any move beyond 6000 and we still may see new highs.
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