Market Outlook 2nd December

Nov 30, 2013 No Comments by

Markets are again trading near all time highs. Nifty is around 6170 levels. On Friday Nifty was trading in green on back of GDP Q2 data. The street was expecting 4.6% growth. A 4.8% growth came as a surprise. So, on Monday we can expect a gap up opening. But one has to understand the reality of these numbers. The numbers are better but are they as good as everyone is thinking? The growth year on year is already suffering from a low base. Inspite of this low base we are not able to grow above 5%. Company’s earnings are showing healthy growth but those are not being reflected into economic growth. The numbers are not adding up. One case can be that the companies are too dependent on foreign revenues.

 

The inflation concerns still remain. Till now everyone was expecting RBI to hold the rates constant to promote growth. Data has shown that growth is picking up. So, RBI may take a hawkish stance to contain inflation.

The global markets are quite as of now. There are no global threats as of now. On Monday markets are expected to go above 6200 levels. This might lead to profit booking. Nifty is likely to remain in 6000-6300 range. As we are approaching the upper end of the range. So, entering into new longs is not advised. Wait for the market to top out and then enter into shorts. For the timebeing, book profit in longs and stay out of the market.

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