'India has always been a bottom-up stock-picking market, and as growth recovers with higher liquidity, mid and small-caps always tend to outperform.'
Two major events, the general elections and the impact of US tapering, will dictate the direction of the Indian markets.
Rajat Rajgarhia, director (research), Motilal Oswal Securities, tells Krishna Merchant that though recent events will cap upsides, earnings momentum and valuation support are likely to keep the markets range-bound in the medium term.
The BSE sensex now trades at a discount to S&P 500 and has corrected by 35 per cent from its peak of 20,873 points to close the quarter at 13,462 point in FY 08. The Sensex hovered around 13,349 on Tuesday. Over CY 04-07, the Indian markets delivered 40 per cent returns each year, the most consistent and superior retuns amongst all the global markets over this period.
While FIIs have pumped in nearly Rs 17,000 crore, MFs have been net buyers to the tune of Rs 9,000 crore.
There is a lot of optimism as regards the defence, railway and manufacturing sectors.
The Karnataka election is being seen as the semi-final to the 2019 general elections and appears to be heading towards a close fight
Better-than-expected financial results in Q3 due to higher revenue growth and margins in key markets fuel the rally
Rupee, bonds may see knee-jerk reaction, as Urjit Patel is considered an inflation warrior
Urjit Patel as the new RBI governor whose focus is on taming inflation has lowered the probability of interest rate cut soon
India Inc's earnings seem to have gathered momentum with a surge in the BSE Sensex over the past two quarters.
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Q1 results indicate more pain ahead, as slowdown has spread to more sectors, pricing power has come down and rising interest cost is eating into profits.
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