The markets rallied smartly by 3 pc during the expiry week to close just below the 6200 mark. The Elections are on in full swing with Rajasthan going to the polls now and Delhi on December 4th. The next immediate trigger for the market will the results on the 8th of December which is next Sunday.
1. The heartening part of this rally is that even the mid caps have begun to rally. Voltas gaied something like 23 pc last week. All signs indicate Nov-Feb rally with a market top for the year being hit sometime around the Jan-Feb period.
2. With the G-Sec yields around 9 pc, the tax free bond issues of NHPC and Hudco opening next week are very lucrative. With the interest tax-free and yileds of 8.91 pc and 9.01 pc, once can lock away some portion of the income for the next 20 years. Historically, these are very high returns post tax.
3. Technically, the markets need to close above 6350 to hit new highs. The way the markets rebounded last week was very heartening and point to a move in the upwards direction.
4. The GDP numbers came in at 4.8 pc, taking the half year GDP growth to 4.6 pc from the first quarter growth figures of 4.4 %. I expect the full year numbers to be between 5-5.5 %. The second half of the year has good agriculture growth as well as Election expenditure. Elections tend to add to the GDP growth numbers.
5. The fiscal deficit numbers for the period April-October has already hit 84 pc of the full year target of 4.8 pc. This is worrisome and could mean more measures like divestments and the Telecom spectrum auction i January.
6. The upside to the markets may remain capped due to the outflow of these issues, as well as the tax free bond issuance. The upside is again heavily dependent on foreign inflows which again is tapering dependent.
7. The short term moves of the markets in the next 2-3 months, is all dependent on liquidity. The fundamentals will start settling down after the outcome of the General Elections in May 2014.
1. The heartening part of this rally is that even the mid caps have begun to rally. Voltas gaied something like 23 pc last week. All signs indicate Nov-Feb rally with a market top for the year being hit sometime around the Jan-Feb period.
2. With the G-Sec yields around 9 pc, the tax free bond issues of NHPC and Hudco opening next week are very lucrative. With the interest tax-free and yileds of 8.91 pc and 9.01 pc, once can lock away some portion of the income for the next 20 years. Historically, these are very high returns post tax.
3. Technically, the markets need to close above 6350 to hit new highs. The way the markets rebounded last week was very heartening and point to a move in the upwards direction.
4. The GDP numbers came in at 4.8 pc, taking the half year GDP growth to 4.6 pc from the first quarter growth figures of 4.4 %. I expect the full year numbers to be between 5-5.5 %. The second half of the year has good agriculture growth as well as Election expenditure. Elections tend to add to the GDP growth numbers.
5. The fiscal deficit numbers for the period April-October has already hit 84 pc of the full year target of 4.8 pc. This is worrisome and could mean more measures like divestments and the Telecom spectrum auction i January.
6. The upside to the markets may remain capped due to the outflow of these issues, as well as the tax free bond issuance. The upside is again heavily dependent on foreign inflows which again is tapering dependent.
7. The short term moves of the markets in the next 2-3 months, is all dependent on liquidity. The fundamentals will start settling down after the outcome of the General Elections in May 2014.
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