There is not much to rejoice from yesterday's rally on D-Street while the upmove definitely made a point that every downs(l)ide in the market is bought into. It is an extremely tricky global market situation where in the major indices are ready for a rocky ride after cracking through the support levels on the down side. We expect another 10 pct downside in the US Market atleast.
Given the condition it is advisable for a retail investor to only think about the longer term picture while investing in Indian equities. Short term the enviornment is not condusive for investing. Lot of midcap stories are generating interest in the investing community. Our checks with major brokerage houses revealed that despite the markets are buoyant, the retail participation in the cash segment is a reason to worry about while F&O segment is witnessing heavy volumes. While the midcap momentum suggests hectic operator activity there is no rush from the domestic retail inestor. This can be interpreted both ways
1. Domestic retail investors generally tend to catch the bus before the last one or two stops (+ve for the market)
2. Some times a domestic investor is smart enough and he sits out when in doubt and this can be considered one such situation.
We expect a massive rally to kick in August and it is time for one to focus on growth stories.
Entertainment stocks jumped on the reports that FDI in DTH space will be hiked to 74%. We feel this month should be the last oppurtunity for investors to accumulate Indian equities and it might be too early for the same. Watch out for some more downside in the first fortnight and pick your stocks.