Wish you all a Happy Deepawali and prosperous New Year (Samvat 2076)
Last year has been quite a tumultuous one marked by event based bouts of volatility. Samvat 2075 has been a tough year for the equity markets by any standards, except when looked through the prism of headline index. So while large-cap index (Nifty) was up by —8%, mid-cap index was down by -10% and small-cap index was down by -14%, one of the most divergent years as far as performance differential between indices is concerned Even the large cap index (Nifty) was marked by concentrated performance with top 10 performers accounting for majority of the gains. Nifty overall has maintained a decent and strong support base near 10500 levels and recently with a strong recovery from 11090 has cruised to touch near the 11600 level maintaining a positive bias with more upside visible in the near future. On the upper side, a breach above 11600 -11650 levels decisively can take the index to near about 11950-12000 levels to retest the previous peak zone. Overall we anticipate a breakout above the all-time high levels to enter a new zone for further upside targets of 12800 -13200 levels.
Global markets were volatile for the Samvat year 2075 as investor’s battled US-China trade war and US Fed's not so unambiguous trajectory on rate cuts. However, ECB's promise of more stimulus lead to a European out-performance. So while US (DJIA) was up by -2%, France (CAC) was up by -8% while Germany (DAX) was up by over 10%. As we write, there is still no clarity on a negotiated Brexit deal. Global yields, reflecting slowdown dropped sharply with US ICY dropping over 150bps between the two Samvats. EMS, however, fared better than DMS with Brazil (—25%) and Russia (—16%) being the best performing markets.
The year also saw the return to power of the NDA government in the general election which bodes well for the political stability and policy continuity. Since taking over in the second term, the government has announced a slew of measures, the most prominent being the cut in corporate tax rate from —35% to -25%. While Samvat 2074 marked the start of the economic slowdown for India (partly as a fallout of the ILFS & NBFC crisis), Samvat 2075 has seen more corporate mis-governances come to light and will actually go down as a year of cleansing for corporate India. As Diwali, the Festival of Lights & Financial Enlightenment is the best time to pick up some high yielding stocks and start our financial investment with a positive note. So keeping this in mind, we have selected some of the promising stocks as Diwali Picks which on technical parameters have strength and potential to yield decent returns in the next one year time frame and which are also fundamentally well placed. We recommend to buy and accumulate these stocks at every decline maintaining the levels as mentioned in the report. Happy Investing!!
Diwali Top Picks 2019
Amber Enterprises India Ltd For Exp Target is 1,180.00
ICICI Bank Ltd For Exp Target is 525.00
Gillette India Ltd For Exp Target is 15,000.00
Century Plyboards Ltd For Exp Target is 300.00
India Cements Ltd For Exp Target is 140.00
RITES Ltd For Exp Target is 440.00
Adani Enterprises Ltd For Exp Target is 272.00
Tata Elxsi Ltd For Exp Target is 1,100.00
Relaxo Footwears Ltd For Exp Target is 800.00
Polycab India Ltd For Exp Target is 1,100.00
Indian Hotels Co. Ltd For Exp Target is 225.00
RBL Bank Ltd For Exp Target is 425.00
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