The beginning of the new financial year promises a roller coaster ride for the market. Besides the approaching general elections, the results season also kicks off with Infy all set to announce results today and as usual, the results are likely to beat expectations. Going forward, the big question is ‘how do we approach the market?’
To begin with, barring IT, pharma, to some extent FMCG, and all the other sectors have shown steep appreciation in the past 3-4 months. Banking and rate sensitives are showing a bounce back on the back of hopes that the worst is over on the rate front. Nevertheless, NPAs have bottomed out and the capital goods, infra pack, and cement have risen on the hopes that the new government would kick off investment in the infra sector, which would boost these sectors. Largely, the positives seem to be priced in and could warrant some profit-booking in the near term since most of these stocks look overbought technically as well.
The ACMIIL research desk has already brought out a report for part booking of select stocks in this scenario and readers are advised to refer to this report released on April 9, 2014 (last Wednesday). We advise investors to encash this dream run.
On IT and pharma front, after a good rise during July 13-Jan 14, they went into a correction mode mainly due to strengthening rupee from levels of 65 to around 60 in the past three months. Several such scrips now look attractive on the valuation front. Keep an eye for ACMIIL’s recommendations, especially for these sectors.
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