Season Greetings!
Globally the markets were stable
with an outlook of increase in interest rate scenario in USA and slowing down
of European economy including England. Chinese were also seen mending their
business model suiting to new developments. Statement in the last week of the
last year by President Trump Vis Vis US & Chinese trade relationship has
thrown some amount of optimism in the global Market.
Back home in India when we look
at the opening and closing numbers of the calendar year Nifty ended with 5.9%
and Sensex 3.1 gains. The sharp movement in crude oil price marked the year
2018. From close to 70 US$ at the start of the year it rose to over 80 US$
before falling to 50 US$ levels near year-end. Consequently, we saw some
widening in current account deficit. Movement in oil prices also influenced
Rupee (currently at 69.80 which was at 63.80 on the first day of 2018) and
interest rates.
Global trade war also kept market
volatile in early half of 2018. Positive derived out of same was that our
dependency of foreign inflows got reduced.
Corrections, in Midcap &
Small Cap stocks were imminent, with the kind of rally they had in preceding year.
Overall, technology funds, which benefited from the sharp depreciation in Rupee
and robust corporate earnings, were the star performers in the equity space.
Meanwhile, PSU funds delivered the lowest returns. On market capitalization
basis, large cap funds outperformed the mid and small cap schemes.
What to expect from 2019.
Interest rate hike will be order
of the year in US. European markets will still take time to settle down. With decline in crude demand globally
(as the prices are also coming down) there is all possibility of the cutting down
production of crude resulting in hike in Crude prices in first half of the new
year. This aspect needs to be watched very carefully going forward in
2019.
Elections and stance of RBI in
the upcoming monetary policy meeting will be events to watch out for in the
coming months. Inflation expectation will also affect market sentiments in the
near term as RBI closely tracks inflation trajectory while determining interest
rates. However, on a long-term basis corporate earnings and the valuation at
which a security was purchased are the two key drivers of equity market returns.
Goal oriented SIP’s
(equity/balanced/debt) would be order of the year. Debt fund in Short term
space would be an ideal call for three year time horizon. Well traders can set an
eye for NIFTY 10000 mark to speculate which looks possible. We can summaries safely
by expecting 2019 to do better than 2018.
Happy Investing
