The market is likely to witness increased volatility as the
December quarter results pour in. How the initial days of the Trump
Administration pan out coupled with lack of clarity on GST and impact of demonetisation
on the economy and corporate sector may further add to the choppiness of the
market. However, investors should be clear that though the market may witness
bouts of correction, a complete blood bath may be ruled out since domestic
funds have a lot of liquidity and are waiting for any steep correction to
happen. Investors will, therefore, do well to pick stocks in a staggered manner
with each correction they witness lest they are bound to miss the bus again.
The market may go into a prolonged bearish phase only if the government fails
to tackle demonetisation effectively with the implementation of GST getting
delayed beyond a point and Union Budget 2017 not able to meet the expectations
of the resurgent economy and the market and if the earnings revival of the
corporate sector get delayed beyond the next quarter.
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