Nifty closed yesterday at 6069 (Intra-day high 6083) and Sensex at 19990 (high 20037).
After Jan 31. this was the first time Sensex has crossed 20 k. This year the sensex has crossed 20 k 3 times. Twice in January and now on May 8.
So is this the turnaround time ?
Facts :
a) Since July 2012 -till March 2013 - FII investments was on an average around $ 2.5 bn. In April for the first time the investments were less than $ 1 bn. And in May again the flow of funds has been high (so far).
b) The Met Dept has predicted normal monsoon , this year also.
c) Commodity prices (crude , gold ) are down considerably . And looks like this trend will continue.
d) Inflation is down to around 6%
e) Interest rates reduced by RBI 25 basis points recently. So RBI reference rate at 7.25% is the lowest for the last 2 years.
f) Scepticism is still high regarding equity prices.
BUT (yeah there is always a but)
a) The Current Account Deficit (CAD) is still high at over 6%
b) The Political turmoil is still around..
c) corruption allegations are still fast and furious
d) Corporates are still not investing in a big way on Capex,
e) Retail investors are yet to participate in the equity market
f) No meaningful IPO in the horizon,
Traditionally May has been a bad month for investments (except in 2009 and 2004 where the returns were in excess of 15% - election months).
So is it time to invest ?
After Jan 31. this was the first time Sensex has crossed 20 k. This year the sensex has crossed 20 k 3 times. Twice in January and now on May 8.
So is this the turnaround time ?
Facts :
a) Since July 2012 -till March 2013 - FII investments was on an average around $ 2.5 bn. In April for the first time the investments were less than $ 1 bn. And in May again the flow of funds has been high (so far).
b) The Met Dept has predicted normal monsoon , this year also.
c) Commodity prices (crude , gold ) are down considerably . And looks like this trend will continue.
d) Inflation is down to around 6%
e) Interest rates reduced by RBI 25 basis points recently. So RBI reference rate at 7.25% is the lowest for the last 2 years.
f) Scepticism is still high regarding equity prices.
BUT (yeah there is always a but)
a) The Current Account Deficit (CAD) is still high at over 6%
b) The Political turmoil is still around..
c) corruption allegations are still fast and furious
d) Corporates are still not investing in a big way on Capex,
e) Retail investors are yet to participate in the equity market
f) No meaningful IPO in the horizon,
Traditionally May has been a bad month for investments (except in 2009 and 2004 where the returns were in excess of 15% - election months).
So is it time to invest ?
No comments:
Post a Comment