Sunday, June 8, 2014

Markets set for new highs, after maybe a pause

The Markets took off on Friday on the back of Oil and Gas sector stocks. with lots of news swirling around, the markets ended the week about 4.9 pc higher. What next for the markets then?

1. The Feel Good factor is at play. The Honeymoon period of the Modi Sarkar is in full play and I expect after some more consolidation, the rally to continue till the Budget announcement in mid July.

2. The Oil and Gas stocks were in focus. Policy reforms are expected and diesel also is almost de-regulated. The under-recovery is down to rs 2.80 and with the rupee strengthening and monthly hikes of 50 p, I expect the entire subsidy to be wiped out in next 2-3 months.

3. No subsidy on Diesel and Petrol, that leaves us only with LPG and kerosene. The Oil Marketing companies are set to rally on this.

4. The target for the Nifty could be 8100 by the time of the Budget presentation. The correction of the move from 6638 to 7564 seems to have ended at 7216.

5. The Rally is absolutely broad based now, and one must clean up the portfolio with dud stocks right now.

6. Those who invested in Gilt funds have a reason to smile, as the yields have fallen from 9.10 pc to 8.52 pc With the RBI signalling further easing, expect Gilt funds to do well.

7. The FIIs have been massive buyers during this week and one can expect this trend to continue.

8. The Monsoons have hit Kerala and that is a relief.

Looks like "Acche Din" have arrived at least for the Equity markets.

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