Revival on the cards

STOCK DOCTOR

dr gs sood

 

Revival on the cards

 

ENTERING 2013, investors need to be cautiously optimistic and should not expect any fireworks. While the fundamentals of the econo­my will continue to improve, the mar­kets may not witness any major upside from the current levels since they have already run up a lot ahead. Recent policy pronouncements have changed the mood and expectations, the first pre-requisite of any bull run and has helped PE expansion from 13 times to nearly 16 times. this has to be followed by execution leading to earnings expansion that may require further rate cuts to revive the invest­ment cycle, failing which the market may fall. Foreign institutional inves­tors have remained strong buyers despite domestic institutional and retail investor selling due to high fixed deposit rates. Domestic selling may considerably reduce, especially if the Reserve Bank of India announces rate cuts with the focus shifting from infla­tion to growth...READ MORE