Pointers to possible gains are there
The year 2012 has been an interesting year in itself for the Indian equity markets. After a sharp up-move in the first two months, markets drifted downwards given the global recession, delays in decision making on reforms and the threat of India’s ratings being downgraded. However, in the last two months, the markets have rallied significantly and have provided the much-needed relief to participants.
However, as we near the close of 2012, the one question that dominates our mind is—will this positive upswing continue well into 2013?
The new year heralds many new resolutions especially regarding to financial discipline and planning of investments and assets and as such, is the time when we decide, either as retail or institutional participants to participate or not in equity. Given the market’s performance so far, here are my views about what we can expect will happen in 2013.
I believe that, there are several factors which point to possible gains in 2013. Having said that, we need to be cognizant of the potential headwinds.
The reasons for such positive expectations are many, starting with the fact that the Indian government, after months of indecision, has started pushing reforms. The fuel subsidy is sought to be cut and FDI in various sectors is sought to be allowed or the respective caps increased. These reforms are a good first step taken by the government, I feel. The government has opened up the doors for more funds to come in. This may help
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