Few things which I feel as a professional u need to have an idea that why markets are getting down and how things are moving. So as per our view, the following are the points which I feel that you need to note for the next couple of months.
1) The Indian markets were beaten expensive and trailing PE was around 29.
2) The valuations of almost all the stocks were sky-high ahead of their earnings.
3) Mid-caps and small caps have already started correction since FEB-18 as I told in my talk as well.
4) the USA has stopped doing any quantitative easing and started sucking out the liquidity from across the globe.
5) So the demand for the US $ has increased which directly makes our currency more volatile and depreciation started occurring in it.
6) USA economy started achieving good growth no. as high as 4%.
7) The average wages per hrs. in the USA climb from 7$ to 23$.
8) So everybody is having money to either invest or to spend so the inflation started picking up.
9) Trump sir gave soaps of taxes 20% to all corporates. So they again had liquidity which US incorporation will use for either buyback of shares or expansion of the facility.
10) This massage went the world over and the $ started appreciation compare to all other currencies across the globe.
11) Remaining issue of correction in markets has been addressed by oil and Iran.
12) Lection fear and liquidity crunch make Indian investors worries.
Now, what is way ahead?
1) Indian corporates earnings is consistent and will see great growth in quarter 3 as well which will be better than quarter 1.
2) From a business sentiment perspective nothing has changed in India. All the groups are doing normal business as usual and targets are getting meet normally.
3) The market after correction is getting a better shape.
4) Trailing PE is far superior for buying stocks and high-quality business at this point.
5) We feel this is the time of starting SIP in good multi-cap funds and lump sum in the balanced category or STP in multi-cap funds.
6) This is a fantastic time to have a good mutual fund in our kitty.
7) We feel NIFTY to touch 20000 and SENSEX to touch 65000.
8) The distress sale is going on in India and we need to graph an opportunity.
9) We feel Steel, Pharma, Consumption, and Banking will be the next BIG Theme in India.
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