The fourth quarter results have a special significance for the corporate sector here. Not only does the quarter help companies to push their volumes and profits, but also gives a glimpse of the likely trend in the coming year for investors.
If you were to predict the performance of India Inc based on the fourth quarter results there is not much hope. Still, the stock markets were on a roll thanks to the liquidity support during the week.
While a number of companies are yet to announce their results, the beginning has been a mixed bag with the tech sector reporting good numbers largely on account of the dollar appreciation and cost-cutting measures. The same was not the case with other large-cap stocks but the surprise package was the banking sector with a few private sector banks posting good numbers.
The sector on the whole seems to have a stabilised look though there hasn't been much good news on the credit expansion front.
Hence, one would expect the markets to be subdued if not come under selling pressure but the recent rally has surprised one and all. The growing consensus is that the rally is on account of a number of factors such as liquidity, lack of bad news and signs of recovery in a few global markets.
Going forward, it is not necessary that the markets will continue their upward trend though there are already talks of the next round of the cyclical bull run taking shape. The best option for investors may be allocation of funds according to risk appetite and the tenure of investment.
As an equity market gets older, it will be even tougher for individual investors and will expose the lacuna in investing techniques. This can be countered with a disciplined approach and systematic investing strategy besides good asset allocation. Till then, investors are bound to be caught on the wrong side at regular intervals.
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