Fundamental View on Markets

So far, our corporate earnings of Q2 have left very little scope to complain from market participants. If L & T and JP Associates delivered a below par performance, stellar numbers from ITC, BHEL and Dr Reddy's Lab have more than made up for their lackluster performances. Currently after the stupendous run up over the last six months, where nearly all the important indices more than doubled, markets are looking tired. There is a huge supply coming in at higher levels. FIIs who were aggressive buyers have also turned cautious. It seems that we are heading in for a much awaited correction. However given the laudable performance of Corporate India in recent quarters and a very encouraging forecast till FY 2011, we expect the correction to be short lived. There are very few markets globally that have the fundamental strength comparable to our markets. Liquidity, which is ample worldwide, is likely to continue flowing into our bourses. Therefore we advise investors to use the current downturn as an opportunity to buy quality stocks with a one year plus time horizon.