Nifty in a stubborn range. OK. Budget is done and over with. OK. No Damage. OK. I am getting fat...NOT OK! Seriously though, from the last time I wrote, things have hit a bit of status quo, markets trading in a tight range. Commodity prices continue to hover high thanks to high speculative interest, crude spikes off and on due to Mid East disturbances.
My condolences to the Japanese people. They are a brave and stoic lot. I am sure they will emerge stronger from this twin natural shocks. In fact, I think their economy may get a little booster in form of reconstruction etc which shall take place now.
What do we do with domestic markets? Though valuations have come off, there is still a fair amount of healthy scepticism across the board. Stock specific seems to be the theme of 2011. Auto sector continues to do well. Tata Motors needs a seperate post to do justice to their turnaround story of JLR. Bajaj continues to maintain its healthy margin and volume profile. Forget MUL and HH for now, M&M looks a decent rural play, so all in all this sector offers some more bite. Ditto for financials and IT.
When will our infra/ cap good guys play? Been a while since they performed, valuations are at an all time low. My sense is there is some more protracted pain, till our macro chinks in the armour are sorted. See, if you cant lend at a viable rate, projects may not take off. There is a liquidity angle to this for the interim. If capex does not kick off, I do not know how well are we going to sustain 9% GDP growth, so it is a vicious cycle. L&T and BHEL have to rock the moment we see a semblance of recovery. It is more of a time correction where these stocks are concerned. It would be an investors call when he would like to get in.
So, watch the cricket world cup for some time, nothing drastic is going to happen in the interim!
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