Nifty touched below 4600 and back. I believe these interim downward rallied will continue for a while till a 4200-4400 base is formed. Traders may also be wary to play this 200pt range now. More than global factors, its the absolute collapse of governance domestically which has caused the weakness in markets. These problems were there before...but like they say, in a bear market everything gets magnified! Fiscal Deficit woes may continue unabated considering the rupee situation and consequent inflation, which remains subdued but sticky. My sense, two more quarters of very bad earnings for corporates, then the new normal where markets have fully adjusted to downgrades.
Stock picking should be done now. Lot of stocks are near their all time lows, most at their 52 week lows. Like RIL, BHEL (yes even BHEL!), Hindalco have tremendous upside for an investor with the courage and patience to hold on. Also like Mundra, G E Shipping, M&M, Exide and Dabur. Understand that except Dabur all these are cyclical plays. So basically when the cycle turns...right now seems far away...is anybody's guess. But what we know for sure are these are stocks with proven business models and are winners. In the financial space as well HDFC Bank is available cheap.
LT, Adani, GAIL can also be looked for some entry/accumulation/averaging...depending on when you entered the markets! Debt yield can be locked in fixed intruments for a longer duration as I believe this may be the peak of interest rate cycles in recent times.
There is light at the end of the tunnel...once we see it...markets will rebound...you do not have to even reach there!
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