MOSt
Advisor
Monthly Markets Newsletter
January 2015
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
USD Strengthens vs Global currencies
Parliament
vs ordinance route for key reforms
Muted 3Q earnings season
expected
Dear Investor,
Market performance:
Indian equities outperformed other markets in 2014 (other
than China) with a 30-31% return on the NIFTY and
Sensex. December, however, was a weak month with a
Global Market
Index
31-Dec-14
MoM (%)
YoY(%)
4% drop in the Sensex m-o-m. Banks outperformed in
2014 with a 65% return. FII inflow for the year has been
strong both in debt and equity at INR257B (+260% Y-o-Y).
Backdrop for 2015:
Inflation:
WPI fell to 0% in Nov'14 and is expected to dip into the Negative in Dec'14.
Consumer Inflation in 2015 is likely to remain below 5% levels while WPI is likely
to be in a sub-2% zone. Benign Inflation paves the way for lower interest rates in
2015. We expect a 50-100bps rate cut in 2015, depending on the US FED stance.
Commodities Crash:
Crude and other commodities have weakened considerably in
the last quarter of 2015 and it would be fair to assume that the uptrend for now
seems to be over. Weak commodities will be a positive for India and other net importer
Sensex
Nifty
FTSE
Dow
Nasdaq
Hang Sang
27,499
8,248
6,566
17,823
4,736
23,605
-4.0
-4.0
-2.3
0.0
-1.1
-1.6
29.9
30.8
-2.7
7.5
13.4
1.3
Economic Pulse
Key Indicators Current Month
Change (%)
IIP (May)
WPI (June)
10 Year Yield
USD/ INR
Crude ($)
Gold (10 gms)
-4.2%
0.00%
8.08%
63.04
57.33
26774
-
-
0.00
1.63
-18.28
2.43
economies. Trade Deficit and Fiscal Deficit should be under control. MOSL estimate
for FY16 Fiscal deficit is at 3.5% of GDP. The FY15 Fiscal deficit target of 4.1% of
GDP would be tough but necessary to achieve target.
GDP growth:
MOSL estimates GDP growth for FY15 at 5.6% with a climb-up to
6.5% in FY16. GST implementation in FY17 could take us to a 7.5-8% GDP growth
given the expected efficiencies of doing business assocaited with GST.
Outlook for 2015:
We remain BULLISH on prospects for Indian Equities with our QUANT team looking
at 9000-9500 for the NIFTY. Banks, Automobiles, Cement, Capital Goods and
Consumption look well-poised to given returns in 2015. Midcaps, selectively, should
add ALPHA to your portfolios. Our "Themes for 2015" and "Crystal Ball Gazing" reports
carry our top conviction ideas and your adivisor can provide you with a copy of both.
HAPPY NEW YEAR & BUY RIGHT SIT TIGHT.
Thought for the month
Ravi Shenoy
Vice President
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