Reliance and HDFC Bank Earnings May Pull Nifty Above 11620
The developments over the past few days have suddenly provided an added gush of confidence in a downbeat market sentiment. The most important factor that had kept the sentiment on D-Street at the lower end, particularly over the past quarter, was the growth factor. Also, a couple of organizations have not shied away from downgrading India’s growth projection in the current week, with IMF revisiting their earlier estimates and pegging India’s GDP growth to 6.1 per cent in 2019. Moreover, India’s retail inflation rate accelerated to 3.99 per cent in September, the highest after July 2018 and the most upsetting part was that food inflation saw a big jump in the month of September to 5.11 per cent from 2.99 per cent in August. Nevertheless, even as this entire if ’s and but’s get discussed, the markets were on their way to march higher as it rose on five occasion of the last six trading sessions and have managed to retake all its important moving averages. While the index has gone up, the market breadth remained the focal point as it remained subdued to weak. Also, the Nifty is not getting the support from its popular sub-index, i.e. Bank Nifty.
Amid all this topsy-turvy development, Life insurance stocks have secured investors portfolio in these testing time as majority of the stock from this sectors were seen on cloud nine. We have always believed and advocated our readers to always look out for stock-specific investment approach in the stock markets, no matter what are the headlines on the newspapers or media about the economy or global trade war. As an investor, our job is to find the best companies and themes to play on. The markets are supreme and they will reward us accordingly. Life Insurance stocks have been blueeyed boy on the D-Street.
The key positive catalysts that are driving sentiments for this sector are the private sectors insurance companies that have shown a sharp growth in business. FPIs have raised their holdings in these stocks, whereas they sold others.
We believe life insurance stocks are likely to continue to enjoy investors’ attentions over the next few quarters, too, though one has to look at the valuations, as ultimately, it all boils down to the valuations factor in the stock market. Meanwhile, the lucky charm of October month continues for the PSUs with the IRCTC registering best ever listing gains of any PSU IPO, surpassing earlier listing gains registered by Power Grid, which was also listed in October month of 2007. This merriness generated by the IPO listing turned to the secondary markets, where the index has rallied 3 per cent plus in the last five trading sessions.
Earnings for the quarter ended September 2019, declared so far, have been more or less in-line with expectations; however, there were couple of surprises with Wipro and HUL beating street estimates. None of the factors that have trolled on the performance of corporate India have changed over the past three months. Yet, expectations of some improvement in the overall financial status of companies with recent corporate rate cut announcements will keep investors hooked on to the numbers.
The Nifty has done well in the recent days. But for it to cross the stumbling block of 11,620, it will need some solid reason to do so. Going forward, the markets will continue to ride on three main planks: The ongoing corporate results with index’s top two heavyweights, i.e. Reliance and HDFC Bank, scheduled to announce their earnings in the coming days, the development on global front, i.e. trade talk and Brexit, and lastly, the buying from the FPIs. Mentioned above are some of the key factors, which could provide impetus to bulls. The time to take selective bets on the market has begun. Buy for the long term and avoid getting trapped in the speculative spiral if you are new investors or are trying to reenter the market after a long time. For now, all seems to be well with the markets as long as Nifty manages to hold its head above the 11,400 mark. Finally, to conclude with, we would like to quote Carlos Slim ‘Anyone who is not investing now is missing a tremendous opportunity’. The message here is loud and clear, if you’re thinking of investing, there‘ll never be a better time than the present. So what are you waiting for?
