Quality Earnings And Easing Geopolitical Situation May Take Markets Higher

Two things are panning out as mentioned in my previous communication – Sensex trading in a range and rise in crude oil prices. Sensex is trading closer to 35,000, while the rise in crude oil prices has started worrying various stakeholders, including the Government of India. While there is no threat to the overall market environment, rising crude oil prices is a worrying sign for the markets. Crude oil has crossed $75 per barrel mark and is likely to gain further ground owing to supply side constraints. 

Despite the crude oil pressure, the markets have cheered the encouraging Q4FY18 results so far and it does look like the results will improve QoQ hereon. What is also heartening to see is the way the global political situation seems to be easing after threatening to push the world economy into a tailspin. There is no trade war happening the way it was projected in the media and definitely it is not going to disrupt the world economy as was being portrayed by a few economists.  
  

In the meantime, I also see Prime Minister Modi’s visit to China and the meeting with Chinese President Xi Jinping as an investment in improving ties. In my view, it is going to be a great meeting between the two global leaders who have expansionary strategy in mind for their respective nations. India has global ambitions, and so does China. I am sure the meeting will chalk out a path for both the countries to pursue their goals, while causing minimal conflict between the two nations. 

In this issue, we have talked extensively about the sector that has been rewarding investors for decades – FMCG. The FMCG sector is on a growth trajectory and is a perfect play on the consumption story of India. We have couple of good recommendations for you in one of the most promising sectors of our lifetime. Tell us if you agree with our observations and our outlook on the FMCG sector and stocks. 

I know our nation is on the right track when I hear that the Maharashtra government has decided to ban the usage of plastic. What very few investors may not have realised is that the ban has impacted some of the stocks negatively and also quite a few stocks positively. Do go through our special story on the plastic ban and how it is affecting the stock prices of certain plastic manufacturers. 

The rise in crude oil price is not good for oil marketing companies (OMCs). In our detailed special report on OMCs, we have analysed the impact of rising crude oil prices on these companies. Have a look at the special report and let us know if you liked it. 

The markets will grow, but at a slower pace this time around. The growth is visible and I do not see any negatives for the markets that should derail the positive trend, as of now. Infrastructure and cement stocks and select pharma and banking stocks and FMCG stocks in general should do well. 

Remember, fundamentals do not lie and are your best friends. Stick with quality stocks and those that have been delivering good growth consistently. It is always a good idea to include stocks that are showcasing growth momentum. However, it is equally important to asses if we are getting the stocks at a good bargain. We are always at your service in identifying such opportunities. 

Happy investing !