Skip to main content

Market Strategy

marketstrategyGlobal markets sold off in May primarily over concerns on the ongoing developments in Eurozone. Over the past month, the DowJones and FTSE were down 8% and 7% respectively. There were significant losses on Asian indices as well with Sensex losing 3.5% . By and large, markets were not convinced that the bailout package was the end of the debt problem and feared that more Euro nations could face crisis similar to Greece.

Going by these developments how did India Inc fair?

The Indian corporate sector reported healthy numbers for the fourth quarter. 4QFY10 BSE-30 Index net profit grew a robust 25.9% yoy. The GDP growth for fourth quarter came at 8.6%, a significant improvement over corresponding quarter of the previous year.

So what's in store for Indian markets ?

From hereon, the markets would be focused on the developments on the monsoon front and of course global events. In the past ten months or so, markets have been largely range bound and have been consolidating between 15500-17600 levels. At this level, valuations are not demanding, but reasonable at 14.8X FY2011E EPS and 12.5X FY2012E EPS.

A full-blown, double-dip recession led by sovereign debt issues in Europe and the US may lead to rapid outflow of FII money from India as in 2008, which in turn could lead to a healthy correction. Currently markets are the higher band of 17000 levels and it could test the lower end of about 15500-16000 levels. Break of this lower band could take it lower to about 14000 levels.

Investors could use this global-led correction to invest in a staggered manner, with medium to long term view.


  1. One could wait for some clarity on Euro crisis, before investing.

  2. SIP is a better way to overcome this volatility.


Post a Comment

Popular posts from this blog

Your Bill Amounts Are Going To Increase From June 1, 2016

Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the Finance Act, 1994. Union Finance Minister, Arun Jaitley, in his budget announcements proposed to impose a cess, called the Krishi Kalyan Cess, @ 0.5% on all taxable services. The present rate of service tax will be hiked to 15 per cent from June 1, 2016, from 14.5 per cent. Take a look at what gets expensive:

Phone Bills: Your phone bills are going to go up. So, pay a good 15 per cent now on service tax on phone bills.

Restaurant Bills :If you are dining in a restaurant that already has service tax applicable, you are going to pay more on your eating out. Though 0.5 per cent on a single bill may not mean much, frequent diners may end-up paying a lot during the year.

Travelling: You will have to pay more for air travel, as there is a service tax on tour operators and travel agents.

What is Gold ETF - Gold Bees, Reliance Gold,Kotak Gold

What is Gold Bees or Gold ETF?

Gold ETFs are open-ended mutual fund schemes that will invest the money collected from investors in standard gold bullion (0.995 purity). The investors' holding will be denoted in units, which will be listed on a stock exchange.They provide returns that would closely track the returns from physical gold in the spot market.

An investor can buy and redeem the units either directly from the mutual fund or from the stock exchange.Presently there are many Gold ETFs traded in NSE India. Some of the listed Gold ETFs are GoldBees,Reliance Gold,Kotak Gold,UTI Goldshare

Why choose Gold?
Gold holds its own in any investment evaluation on its strengths as a hedge against inflation, value in the event of political uncertainties and its traditionally negative co-relation with other asset classes such as stocks, fixed income securities and commodities.

The value of goods and services that gold can buy has remained stable unlike currencies that have seen significant…


NIFTY BEES - is the first ETF (Exchange Traded Fund) in India, which seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. It gives you the most diversified exposure at lowest possible unit size. Approximately value of Nifty bees will be 1/10th value of the prevailing Nifty price.

ETFs are one of the latest financial innovations and any new concept takes time to be known widely. Globally it took more then five to seven years before it could be of any significant size. In India, it was introduced with Rs 21 crore in size , a fraction of the mutual fund industry, it has come far with more than Rs 700 crore in size with six ETFs.

The Nifty BeES also scores over other index funds due to its low tracking error and expense ratio, apart from easier tradeability as it is listed in the NSE. One can also consider doing an SIP in Nifty BeES.

Some of the reasons to invest in Nifty Bees : Investing in Exchange …