Are You Scared?

460%+ Returns: Jan 2003- Dec 2007 (1100-6200 NIFTY) – 5 Years of Bull Run.  Though there were multiple correction in between, few large one as well, but the bullish Momentum was maintained. So, current 60%-70% Equity Run up should not scare you. A proper scan of Macro and Microenvironment is necessary.

Few Positive to begin the year with:

Dec 2020. Record GST collection of INR 1.15 Crore. A Y-O-Y growth of 11.6%. (Remember Corona impact was not there in Dec 2019) Monthly GST collections have been showing higher year-on-year numbers since September 2020, showing revival in the economy.

Stock Market rally was majorly driven by Foreign Funds and Domestic Investors being net sellers. But with recent approval of US $900 Billion relief Package, it does not seem that money flow will stop chasing risky assets. NIFTY gained a grossly unexpected 15%, with over INR 1.6 Lac Crore Inflow of Foreign Funds. With incredibly fast Vaccine roll out, the economy and businesses remain upbeat.

Most developed countries have a calendar year financial closing. Also last week of December till 1st Week of Jan is holiday period. And top global fund manager starts afresh and a different view of the global markets from 2nd week of Jan. hence first few weeks of the year are always crucial.

Some More Reason to Cheer:

  1. December Passenger vehicle sales growth in double digit. Maruti, Hyundai (the major chunk). That too in Dec 20 Vs Dec 19. A year back corona was not there.
  2. Steep Earnings upgrade by analyst of NIFTY 50 Stocks indicates stable markets. We have been drumming about historical high PE (Price/ Earnings). So, going forward either Prices(stock) will fall to stabilize, or Earnings (corporate Earnings) will rise to Justify the High prices. Either ways PE comes done.
  3. GDP Rebound Lined up: Nomura expects India to be fastest growing Asian Economy in 2021 and Goldman Sachs pegs 10% GDP growth for this calendar year. Thanks to the low base effect of 2020. We expect public Capital expenditure to rebound and infra spend to boost growth.
  4. Lender received fewer loan recast Application: Bank and other lenders have received request of only INR 2 lac Crore worth of Loan restructuring. Though they anticipated and provisioned for over INR 8 Lac Crore. This indicates, the financial impact of Corona is lesser than anticipated.

Well, these all are BIGG positives for New Year, but I am no way indicating towards any irritational exuberance. Any major negative news can send markets for some overdue correction. I am strong advocate of Asset Allocation, and only Right Selection of Assets can help you have a winning Portfolio.

Have a Fantastic 2021.

Best Wishes!!

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