MOSt
Advisor
Monthly Markets Newsletter
September 2014
In This Issue
•
Market Outlook for the month
• Equity Market Outlook
• Derivatives & Commodities Market Outlook
• Large Cap and Mid Cap Investment Ideas
• Model Advisory Portfolios
• Recommended Funds
• OrionLite Trading Terminal
Key Highlights for the Month
GDP growth at 10 quarter high.
Sequential Improvement in WPI
Mid Caps on a roll with 10% outperformance to nifty during the last 4 mths
Dear Investor,
Market performance:
Nifty took some breather with a slower pace of upmove
to 3% in August after a rally of 5% and 1.5% in June
and July respectively. Bank Nifty also moved up by 3.1%
during the month. CNX Mid Cap moved up by 2.5%
Global Market
Index
31-Aug-14
MoM (%)
YoY (%)
during August- a 29% apprecaition over the last four
months, well above NIFTY's 20% during the same period. CNX IT continued its rally
for the second consecutive month with returns of 3% in August .
Economy and Macro:
Data on domestic macro improved on a sequential basis, which contributed to rally
in markets. Market participants are hoping for a revival in economic sentiments under
the new government. CPI for July came at 8%, which was higher than June's 7.3%
due to higher vegetable prices. However, WPI for the month of July 2014 came in
at 5 months low of 5.2% against June's 5.4%. IIP for the month of June also came
in at lower than expectation at 3.4% vs 5% a month ago.
The markets were enthused by GDP growth data, which came in at 10 quarter high
of 5.7% for first quarter of FY15. Within components of GDP, industry growth showed
the best improvement with growth of 4.2%, a nine quarter high. Services sector is
yet to accelerate with growth of 6.8%, which is roughly same as the average of FY14.
Outlook:
The rally in Indices over the last 4 months has taken valuations a little higher than
the long period average. We have again increased FY16 estimates for Sensex EPS to
1836, which is little more than 15% yearly growth. Downside seems to be limited
in Index due to expectations of 14-15% earnings growth in the next 2 years after
~8% growth in the last 5 years. Good Mid Cap stocks still offer a lot of potential
in the next 3-6 months. Our model portfolio for Mid Cap Stocks, which has returned
more than 100% during the last 4 years, offers a very good selection of high quality
companies. We continue to prefer defensives like IT and Pharma to hedge against
any short term correction in the market after the huge rally in the last 4 months.
Sensex
Nifty
FTSE 100
Dow
Nasdaq
Hang Sang
26,638
7,954
6,820
17,098
4,580
24,742
2.9
3.0
1.3
3.2
4.8
-0.1
43.1
45.4
6.3
15.4
27.6
13.9
Economic Pulse
Key Indicators Current Month
Change (%)
IIP (May)
WPI (June)
10 Year Yield
USD/ INR
Crude ($)
Gold (10 gms)
3.4%
5.19%
8.56%
60.51
103.19
27923
-27.66
-4.42
0.82
-0.08
-2.65
0.06
Thought for the month
Rakesh Tarway
Vice President
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