Few Words on Market…

by Vivek Karwa, Certified Financial PlannerCM 

150324 – Don’t know how many noticed the recent movements in the market. For quite some time, in fact it was many times mentioned, in the previous articles that the Sensex should test the 30006 mark on the higher side. The recent high made on 4/March/2015 was 30025 on Sensex and then we saw a correction. We have seen a low of 28158 till now and market seems to be stabilizing in this area. We should see a good support at 28000 and then another good support at 27800 in the short term, best support comes at 26200 on Sensex.

Markets generally move based on news flow. We had several news events over last 45 days and the situation seem to be drying up now, hence the profit booking. As the old saying goes: buy the rumors sell the news, hence the market is now consolidating, and will look forward to more news.

We started with the Railway Budget and first time since I have started tracking the budget saw No New Trains introduced. The vision was very clear that it makes no sense to just announce new things and then keep them undone. It actually made sense to clear the back log and improve the amenities which the passengers like us actually expects.

As usual the critics criticized the rail budget as a mere piece of vision document. The answer to them lies exactly in what they are saying. The budgets till now actually lacked any kind of vision for the corporation which is used by crores of people daily and employs the highest number of people.

Then came the finance budget, the budget was highly awaited and tracked by everyone, being the new governments first full year budget. Agreed that it’s a people unfriendly budget in the short term but will turn out to be a huge boost in the long run.

Both the rail and the finance budget were first misunderstood by the markets on the first instance. That’s why the markets saw a correction after each budget, then after realizing the hidden agenda in it, the markets gave thumps up. The Sensex and the Nifty movements clearly tells us this thinking!

There are many positives happening now. These things have to start reflecting on the ground. Have a belief that in next 12 – 18 months the Indian economy will be in much stronger position and the same is clearly voiced by all rating agencies. The growth projections have already been raised up by the global rating companies.

The first half of the budget session of the parliament has passed off. The data says it was one of the most productive sessions of the recent history, though there were many attempts to throw the government in to the policy paralysis state which some of us have actually become used to. This sends the signal to the global investors that the Indian politicians mean business (hopefully) and thus many bills are being passed within one session.

The Insurance Bill, Mining Bill and the Coal Bill are the major ones which has attracted the attention of the world. Insurance bill has been wandering around the corridors of the parliament for many years and finally has been disposed off for good. This sector alone is supposed to attract more than 35000 Crs in next 3-5 years.

Investors should gauge all such things with positive outlook and use opportunities to add good quality companies in their portfolios. Sensex hopefully should test the range of 33600 – 35000 in the current year 2015 and to reach those levels support from good quality stocks is pertinent. Happy investing and wish you a profitable new financial year.

This Article will be Printed in the Investors Digest Magazine of TamilNadu Investors Association (SEBI Recognized)

Disclosure:- It is safe to assume that the author may have interest in the sectors recommended in this news letter. Seeking personal advice from your Financial Advisor is recommended before acting on any of the substance given herein. The numbers, figures, etc., presented may have been taken from various sources.


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