Value emerging at lower levels in some pockets of this market
Jimeet Modi
Modi believes that price is the most important factor in investing. He is credited with developing the AIRM (TM), an approach to screening stocks and businesses in a scientific manner. His role model is Warren Buffett.
Synopsis
The Nifty50 has broken the long-term trend line this week which was valid since last one year.
Events of the Week
US, the biggest proponents of global free markets, was able to keep inflation below 2 per cent for a long time in spite of loose monetary policies, but all these will change permanently with the imposition of import tariffs at 25 per cent on steel and aluminium at 10 per cent. Subject to larger repercussions on the global trade practices henceforth, the inflation will rise in US, which will further push the Fed to increase interest rates harder thereby puncturing the equities rally across the world.
The world’s economic order will change, breeding inefficiencies and thereby increasing cost of capital and therefore interest rates will remain alleviated.
Technical Outlook
Stocks Recommendations
Expectation from the Week
The market is undergoing a state of rapid iteration with capital shifting from fundamentally weak businesses to stronger ones, particularly those companies which are catering to India focused markets.
Export-oriented businesses are expected to take a hit going forward in the new world order. Currently domestic factors have taken a back seat, but beginning new financial year, when results are rolled out, the market will take important clues after assessing the corporate scorecard till that time market is expect to remain subdued to range bound. Select investments in only bluest of the blue stocks can be done at these levels from long term investments perspective. Nifty 50 closed the week at 10,226 down by 2.21 per cent.