India Strategy...December should prove good for bulls: Morgan Stanley
There does not appear to be a common cause for these poor months, least of all the starting point of valuations (Exhibit 2). Ordinarily speaking, such as this time around, December should prove good for bulls. Are there reasons for it not work this time?
- The fiscal cliff in the US negatively impacts the SPX. However, market positioning in India is cautious if the put-call ratio is an indicator.
- India fails to clear the NIB plan. The market expects some action on this front in December – if the NIB plan appears practical, it will help equities.
- The parliament session causes damage to the policy environment. Expectations are low, so an upside surprise is more likely.
What to buy this December: We prefer large-cap cyclicals in banks, autos, media and industrials. The stocks in our focus list include IDFC (IDFC.NS, Rs157), ICICI (ICBK.NS, Rs1033), Maruti (MRTI.NS, Rs1494), Tata Motors (TAMO.NS, Rs259), Zee (ZEE.NS, Rs196) and L&T (LART.NS, Rs1591).
India Infoline Research Team / 08:44, Jun 26, 2015
IIFL is hosting 10 companies at a Management Roadshow in Mumbai today. The opening is a subdued start. US market saw minor losses with Dow, S&P 500 and Nasdaq closing marginally lower.