Satish Betadpur of Independent International Investment Research says
The markets' reaction to the news of scanty rainfall was just. "Although the India Meteorological Department (MET) says that in the next couple of days monsoon could revive, that’s something we need to wait and watch. But the positive to take out of it is that the market did not go down, it was just selective stock that have gone down. The market stayed positive with the global cues and that’s something which we should look ahead for in the next coming days."
Betadpur stated that that he would also be very cautious about owning anything in the space which is dependent on rural incomes or where inputs require commodities coming in from rural income stocks such as Hindustan Unilever.
Nishid Shah, President and CIO, IDFC Investment Advisors, feels monsoons are not going to severely impact or change the course of the market. "In Q1, we have seen margins improving by almost 4% points and cost have come down because of strong rupee. Material cost has been down, interest cost has come down sharply, and that is going to be the case for the next three quarters. We have already seen Sensex numbers being upgraded to 3-5%. The Bloomberg consensus estimate of Rs 890 is going to be actually revised upwards gradually to somewhere around Rs 930-940 by the time we end the year. As you approach March-June 2010, we will still be talking about Rs 1,100 for the Sensex. If everything goes well, then by April to June we should be seeing market in a new high."
Road ahead for markets:
Shah sees the markets trading sideways or consolidating for the next 2-4 weeks. "Then, we will definitely break out on the higher side. The monsoon is not going to be as bad as people predict. It will have an impact but a limited one unlike in the past."
According to him, we are seeing strong liquidity across the globe and two big destinations for that liquidity are China and India. "At the right price and right valuations, there is huge money waiting to come in the country."
He advises investors to do a bottom up stock selection. "Identify the right stocks and managements and just wait for your time. When the correction is over, just go and buy. I think we are going to see a very different level in 6-9 months."
Jitendra Mehta of Edelweiss Securities feels
The correction that started last Thursday is continuing. "We are possibly going to see further downside from 4,430. Maybe it could consolidate around 4,350-4,300, before a further upmove can be initiated."
India versus global markets:
Betadpur feels India will underperform because of the monsoon hangover. Unlike China, we have potential for higher fiscal deficits, so there is less flexibility for the government to do stimulus spending that other countries are doing. There is also the risk that our currency will weaken. From a global perspective, India will relatively under perform. It will have some absolute performance by the end of the year, but relatively it will be worse-off than other markets. If the rupee depreciates, export-oriented sectors will benefit because the rest of the world will obviously be picking up."
source: MC
The markets' reaction to the news of scanty rainfall was just. "Although the India Meteorological Department (MET) says that in the next couple of days monsoon could revive, that’s something we need to wait and watch. But the positive to take out of it is that the market did not go down, it was just selective stock that have gone down. The market stayed positive with the global cues and that’s something which we should look ahead for in the next coming days."
Betadpur stated that that he would also be very cautious about owning anything in the space which is dependent on rural incomes or where inputs require commodities coming in from rural income stocks such as Hindustan Unilever.
Nishid Shah, President and CIO, IDFC Investment Advisors, feels monsoons are not going to severely impact or change the course of the market. "In Q1, we have seen margins improving by almost 4% points and cost have come down because of strong rupee. Material cost has been down, interest cost has come down sharply, and that is going to be the case for the next three quarters. We have already seen Sensex numbers being upgraded to 3-5%. The Bloomberg consensus estimate of Rs 890 is going to be actually revised upwards gradually to somewhere around Rs 930-940 by the time we end the year. As you approach March-June 2010, we will still be talking about Rs 1,100 for the Sensex. If everything goes well, then by April to June we should be seeing market in a new high."
Road ahead for markets:
Shah sees the markets trading sideways or consolidating for the next 2-4 weeks. "Then, we will definitely break out on the higher side. The monsoon is not going to be as bad as people predict. It will have an impact but a limited one unlike in the past."
According to him, we are seeing strong liquidity across the globe and two big destinations for that liquidity are China and India. "At the right price and right valuations, there is huge money waiting to come in the country."
He advises investors to do a bottom up stock selection. "Identify the right stocks and managements and just wait for your time. When the correction is over, just go and buy. I think we are going to see a very different level in 6-9 months."
Jitendra Mehta of Edelweiss Securities feels
The correction that started last Thursday is continuing. "We are possibly going to see further downside from 4,430. Maybe it could consolidate around 4,350-4,300, before a further upmove can be initiated."
India versus global markets:
Betadpur feels India will underperform because of the monsoon hangover. Unlike China, we have potential for higher fiscal deficits, so there is less flexibility for the government to do stimulus spending that other countries are doing. There is also the risk that our currency will weaken. From a global perspective, India will relatively under perform. It will have some absolute performance by the end of the year, but relatively it will be worse-off than other markets. If the rupee depreciates, export-oriented sectors will benefit because the rest of the world will obviously be picking up."
source: MC
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