Where are the bears? Heard a lot of them shouting that nifty wud reach 5400 a few days back. Almost all 'analysts' were quite vocal about it. And now they are blaming the fact that govt is pushing through the reforms in parliament etc.
The reason for the recent rally, in my opinion, has little to do with whats happening in the parliament, although a bad news from there would have delayed the rally or brought about a short term bear phase. Anyways, the fact that next year we would see a slew of rate cuts is what is driving markets up. When you are quite sure of this happening, obviously all that starts getting priced in from now. So I see this rally as 25bps rate cut in Jan being priced in, nothing more. That is why you had banks and rate sensitives as the biggest gainers. The action in parliament was just a trigger for something which was anyways coming,, though I must add that the fact that government seems quite serious about the whole reform process must have revalued equities a bit too.
Anyways, I have been long banknifties virtually all this year and think that would continue to roll over my positions for the next couple of years or so. As far as other sectors go, would short only when see a strong alpha for that. Otherwise one can be safely long on most sectors and keep adding positions on declines. Rate cuts also revalue pharma or FMCG stocks, though to a lesser extent. And also these sectors are growing, so earnings growth would too help in price appreciation.
Would try to update my views on other companies/sectors too.
Cheers,
Roopak.
From where i could get Capital Market's Indian Economy Review like data