2. Equity View:
Both the indices viz., Nifty and Sensex hit their fresh lifetime highs after closing 0.2% up from last week.
The recent research reports and opinion polls indicate clear majority of the NDA and markets are excited
of that prospect. We continue to hold a positive stance with markets going into the elections.
Though the economy has bottomed out, no significant signs of revival are visible. We would need to see
some more data points like cement and auto sales number to conclude whether there has been an actual
uptick. IIP continues to be in the negative territory for quite some time and inflation both – CPI and WPI,
continues to be elevated with slightly higher than expected data in the last month. We expect a gradual
inch up in the inflation from now till September considering an expectation of food and vegetable prices
to pick up. One of the reasons for the same is monsoons which are expected to be below normal for this
year. However this is the first forecast thus there might be some revision going forward but as of now,
Ecologists all across the world have been sharing ideas about the El Nino effect which can create some
disturbance in the rainfall in some parts of the world this year.
The advantage in India is the poll season due to which there is going to be some stimulus into the
economy. The various forecasts estimate 0.4-0.5% of the GDP to be spent on the elections across all
political parties and institutions, which should act as buffer for economic growth to fall further in this
year. In terms of company results, IT sector has come up with decent set of numbers with HCL Tech, TCS
and Wipro witnessing better than expected results. Though Infosys faces growth issues we expect
pressure in the short term. Broadly, IT is expected to deliver ~15-20% annualized returns from this point
of time. Tech Mahindra, TCS and Infosys remain our top picks.
3. News:
DOMESTIC MACRO:
Crisil says a decisive mandate in the ongoing general elections could help India grow at an average of 6.5%
over the next five financial years.
India’s conference board leading economic index for March rose 0.2% in March, following a 0.4% fall in
February.
India’s forex reserves rose by $2.8bn to $309.4bn during the week ended April 11.
GLOBAL MACRO
EURO
Euro zone’s consumer price index rose 0.9% (M-o-M) in March following a 0.3% rise in February.
United States
US Fed Chair Janet Yellen says the Federal Reserve will keep its benchmark interest rates at exceptionally
low levels for a considerable time until employment and inflation reach healthier levels.
US initial claims for state unemployment benefits ticked up 2,000 to a seasonally adjusted 304,000
for the week ended April 12.
China
China’s industrial production expanded by 8.8% in March from an average growth of 8.6% in the January-
February period.
5. Jharna Agarwal Varun Goel
Nupur Gupta Ridhdhi Chheda
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