The Nifty Index features 50 of the largest companies in the country and represents close to 50 per cent of total market capitalisation. It is now trading at valuations that could only be justified if India Inc grows earnings at better than thrice the GDP growth rate. This is extremely unlikely, says Devangshu Datta.
The focus is on corporate results at one level but global news will also have an impact
'The anonymous electoral bonds means that political affiliations will be even harder to ascertain for the voter or the minority shareholder.' 'The government of the day will, of course, know, exactly which corporate is making donations to which party.' 'Hence, the government will be in a wonderful position to exert "moral pressure" on corporates which make donations to Opposition parties.'
Liquor sales will obviously be hit. So, will real estate prices at what used to be prime locations, close to major thoroughfares. Food and snack sales close to highways will also, in all probability, be affected.
Investors who play follow-the-leader and invest wherever the Foreign Portfolio Investors are going may face painful losses.
'In 1984, George Orwell dreamt up the concept of a dictatorship that worked on surveillance.' 'The reality of 2017 goes a long way beyond everything that Orwell imagined.' says Devangshu Datta.
References to the stock market occur in popular discourse only when the market is overheated and normal middle class people are entering stocks with an unhealthy short-term perspective, says Devangshu Datta.
Nifty continued to register successive new highs as it crossed the 9,200 mark on Friday
Foreign portfolio investors have been net positive since the Union Budget
'Ignorance isn't a problem when it's a question of common citizens having forgotten (or never learnt) middle school science.' 'It becomes a problem when it's displayed by policymakers and people of some influence,' says Devangshu Datta.
Provisions of long-term capitals gains tax is now applicable after only two years.
Q3 results have been poor but better than extremely low expectations.
The Budget will obviously be crucial. But US President Donald Trump may have even more of an influence than Finance Minister Arun Jaitley when it comes to sentiment, argues Devangshu Datta.
Devangshu Datta highlights the silver lining for the long-term investor.
At a time when the Modi government is attempting to push cashlessness with coercive means, Devangshu Datta explains why cash usage is popular even in nations with good cashless infrastructure.
Trading such scenarios takes discipline.
Devangshu Datta predicts the good, the bad and the ugly of currency trends for the coming year.
The Nifty is up 6.5% in the last 12 months. The NSE IT Index is down 10% in the same period. But will the sentiment improve going ahead?
Dealer despatches will probably be a good signal of economic turnaround or further deterioration, says Devangshu Datta.
Invest in stocks of export-oriented and capital-intensive companies, says Devangshu Datta.
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