Dear patrons, as I write this edition of weekly blog, we are sitting pretty at an all time high on almost all indices. The Indian markets have shown tremendous strength over the last month or so. Benchmark index Nifty posted consistent gains on all but one trading session over the last week and added almost 3.5%.
Election results in 5 states were in favor of the ruling BJP, which was welcomed by the bulls. These elections were treated as a precursor to the general elections next year, and the ruling party getting a thumping majority is good sign for the future.
On the economic front, RBI's Monetary Policy Committee announced its bimonthly policy, where in interest rates have been kept unchanged and the governor was pretty dovish in his stance for the future. Indian economy has been resilient over the tumultuous period of pandemic, wars and slow-downs. The RBI has been very proactive in its approach and navigated very smartly through this period. We believe we are at the peak of interest rate cycle and should soon see rates lowering. Lower rates should provide further impetus to an already buzzing economy, propelling it towards newer highs in coming years. Fall in crude oil prices also augurs well for the Indian economy as it eases a lot of import bill.
Global markets have been quiet for some time now. Indian markets are outperforming peers by a fair margin. We believe that this outperformance will continue in time to come and a massive realignment will take place in global order.
Let us have a look at what happened last week and try to figure out what is in store for next week.
It was one way traffic in the markets last week. Bulls made a mess of bears and catapulted the benchmark Nifty towards 21000 from around 20000 in just 5 sessions. We are in an uncharted territory on the Nifty and some resistance may be faced around 21000. Market remains "Buy-On-Dips". It may be a prudent idea to book some profit and stay on cash for the time being and wait for some corrective action to reenter.
BankNifty, which was lagging till last week was a front runner last week, outperforming the Nifty and making a new all-time high. BankNifty is also in an uncharted territory and may rise some more. 46000 appears to be support. BankNifty also remains "Buy-On-Dips".
Interesting time lie ahead for the Indian investors, as the indices climb newer highs. Traders have to be judicious in selection of stocks. We are cautiously optimistic on the market. Future looks bright.
Stay Invested!!!
“The most important quality for an investor is temperament, not intellect.” ~ Warren Buffett
P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.
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