As Market Resilience Faces Stress, keep a close watch

The equity markets continue to stay volatile, and it is no time for the bulls to relax. Inflation levels are coming back to haunt and deflate the optimism that investors have enjoyed over the last couple of years.Reserve banks too are finding it difficult to tame inflation levels in a slowing economic scenario – a situation that can be seen manifesting in the largest economy in the world i.e. USA. Meanwhile, Indian economy and its equity markets have so far shown great resilience. However, we should not ignore the warning bells coming from the western economies.

Retail participation in the country has been vibrant as is reflected through the fact that over the past few months the Sensex has been moving in a band between 55,000 and 60,000. At 55,000 levels we see a lot of participation that pushes the index higher. Will the haunting inflation and rising interest rates break this resilience of the investors and give way? Market indicators are pointing in the affirmative but the Indian markets are known to surprise all. So, keep your cards open.

The earnings’ season is vibrant this time around and as always market participants are busy decoding the business outlook from the management commentary and earnings’ report for this quarter. To make it easier for privileged investors that include all our readers, we have come out with a detailed earnings’ analysis in the cover story. We have highlighted the outstanding results and discussed some sectoral performances as well.

In one of our special stories we have recognised the growing trend of preference by traders for Bank Nifty. Various strategies that can be implemented for profitable outcome are discussed at length in this exclusive story along with the outlook for the Bank Nifty index. Meanwhile, the power sector is in the news as the demand supply equation is clearly placing power companies in an unprecedented opportunity zone. Our special story on this sector explains in simple language the ground situation while also highlighting the great opportunities that the industry can avail of but has ignored for quite some time. Do share with us your feedback on this report.

The markets in the short term do move based on sentiments.In the long run, fundamentals prevail. The sentiment is weak right now but with a strong and visionary leadership in Prime Minister Narendra Modi, the Indian economy may move from being self-reliant to the world beginning to depend on India. A huge opportunity exists for the manufacturing sector in India. One of the best ways to capture the broader trend in the economy is to invest in the equity markets. There is no other better way to be a shareholder in the Indian growth story than to invest in the equity markets.

Keep a watch as the LIC IPO and another 10 IPOs lined up for month of May pan out. Remain bullish on the businesses that you understand and have earnings’ visibility in. In the short term sentiment will prevail and dominate – don’t give in to short-term noise. Focus on the long-term prospects and growth opportunities. I am sure the dynamic situation we are facing right now will lead to some lucrative opportunities in the near to medium-term. Your favourite magazine will continue to guide you with the best wealth-creating ideas. Remain tuned and get a close view of how the markets play out!

RAJESH V PADODE
Managing Director & Editor