Sunday, April 20, 2014
~~Fakhri H. Sabuwala
As the elections progresses and as the opinion polls hit the front pages the discussion amongst investors get louder and louder. The discussion is slowly shifting from the PM candidate NaMo to worries whether the rally will sustain ???? The worry and excitement is in equal proportion as to where is the Nifty or the sensex headed????
Today it is a known fact that the retailers at Dalal Street are absent. Whatever numbers are there they are awaiting an escape route and make hay in the NaMo shine and do away with their demat accounts. It is reported that in last month over 55000 demat accounts have seeked closure and many more are on that way.The sentiment may be bullish revolving around BJP win and the 20% to 25% rise in the sensex and nifty in last six months is hardly supported by changing fundamentals. The long positions are only of FIIs and retail investors are conspicuous by their absence.
Will corporate earnings shrink or grow from hereon ? By most admission, it could only grow irrespective whether the investment cycle revives now or in future. Fiis have brought in handsome flow but the same is ebbing recently. The local polls and uncertainties attached therewith are playing on their minds. Simultaneously all the three US benchmarks DOW, NASDAQ and S&P 500 are in the new upward zone and that could restrict the robust inflows for now atleast. The scene is slowly shifting to Q4 results and development of monsoon clouds over our horizon. The current prices factor in NaMo's win and there shall not be any push ahead if NaMo returns. On the contrary market will search for new positive triggers for sensex and nifty to rise and they shall be diificult to find. So booking profits in bluechips, heavyweights, mid caps and small caps may not be out of place .
Some real outperformers and how much up they are from Feb end
ITC up 13% , Mcleod russel up 12.6%, BajajCorp up 12.2%, KRBL up 7% and Tatacoffee up 6.7%
HCL INFO up 58%, Polaris up 50%, Tata Elxsi up 31%, Geometric up 29% and nucleus software up 25%
Astrazeneca up 38%, Jubilant life upm 26% , alembic pharma up 20% Pfizer up by 13%, Dr Reddys up by 7%
Apart from these likes of Crompton greaves