Sunday, December 28, 2014

2015: Crunch Year for Reforms

The markets have rallied in 2014 on hope. they have rallied about 30 pc on hopes of a new Government and good Governance. 2015 is the crunch year when the Government has to deliver on the promises made.

1. It is soon coming to crunch time for the Government. The Reforms have to be put in motion. The Union Budget is the first milestone which can be seen.

2. The Government has taken an ordinance route for key bills but they will have to be validated in the next Budget session. The Budget session starts in late February.

3. The markets are now at a key inflection point. They can continue rallying on hope till the budget or continue their correction and then if the budget is reform oriented then rally after the budget.

4. The FIIs have been net sellers the entire month of December. This has partly been due to global reasons. The US posted a GDP growth of 5 pc and the money is flowing towards the US. The Dollar is strengthening and the US equity markets are on a roll.

5. Technically, the markets should touch about 9000 once in the first half of the year.

6. After hitting the top of 8627, the markets corrected till 7961 a fall of about 666 points. Then the markets rallied till 8365 a gain of  404 points. If 1 more down leg is pending, then this could have targets of 7699 or  7300.

This is now a market which is a buy on dips markets. The area around 7700-8000 offers a very good buying opportunity.

Even the Gilts have gone back to a yield of about 8 pc which also gives another entry point into the Gilt funds.

No comments:

Post a Comment