Tuesday, December 31, 2013

Markets sign off on a positive note: Crystal gazing for 2014

Indian stock markets attained new highs towards the close of calendar year 2013 after a gap of almost 6 years, and have closed the year on a positive note. The Sensex gave a yearly return of 9% and Nifty 7%, but the Midcap and Small-cap indices burnt a hole in the pockets of investors with double digit negative returns. Gold & Silver also turned bearish after attaining new heights during the year. But the coming year promises to be a year of extreme volatility, as India enters in the election year.

The markets would continue to be driven by easy liquidity for the first few weeks of the new year 2014, amidst negative news on the economic front. FIIs would allocate new funds to the emerging markets to sustain the momentum. Markets have pinned their hopes on a strong Govt. led by BJP at the centre. However, the AAP factor cannot be ignored any longer. Any setback to the BJP's electoral fortunes would lead to profit booking in the markets. Although the broader consensus has emerged that it is a 'buy on dips' market during 2014, the market may fluctuate within a wide range of 5500-7000 on Nifty, and 19000-24000 on the Sensex.

Other asset classes like Bonds, Real estate & Bullion are not likely to fare better during 2014, so Equity as an asset class would be the best bet. However, investors are advised to enter the market towards the lower end of the range suggested above to reap rich rewards from equity investment during 2014. the year 2014 promises decent returns on Equity investment provided you take informed decisions. A good long term investment opportunity is likely to emerge immediately before or after the General elections due in April-May 2014. Keep your funds ready to avail this golden opportunity.

I take this opportunity to wish you all a 'Very Happy & Prosperous New year 2014'. May you reap rich benefits during the year on your Investment portfolio