INSUBCONTINENT EXCLUSIVE:
The domestic stock market is clearly in the whipsaw mood, typically known as a correction phase
It is said that all the monies made during a bull market gets marooned in a correction phase
The market at first slipped on the bad news of trade wars and the recovered on the good news of oil moving lower
The indices develop upward gaps but then again come down
This is nothing but a directionless market.
This kind of phases comes often, but unfortunately no one can predict the end of such a
On the one hand, FPIs are selling; they have sold stocks worth Rs 5,777 crore in June while at the same time mutual funds have bought shares
worth Rs 3,489 crore.
It seems even institutions have split opinion on the Indian market
Investors should stay on the sideline, till the market forms a panic bottom
In the meantime, one should be make a list of fit stocks ready for investment
Key events of the weekEveryone talked about the health this week, but what about having a healthy portfolio
How to identify fit and healthy stocks The number one parameter is to check the health of a company is by looking at its ROE
The higher the ROE the healthier the company is in terms of its operational efficiency
Top eight companies having ROEs in the upwards of 40 per cent are Hindustan Unilever (75%), Colgate (50%), Castrol India (68%), Hawkins
Cooker at(54%), Bajaj Corp (45%), Page Industries (45%), PG (40%) and Symphony (40%).
They all have consumer-oriented businesses having
consistent single-digit growth
When investments are made in such healthy companies, they become compounders over time
This is how the portfolio becomes happy.
Technical OutlookThe Nifty50 is showing sideways consolidation, trading in a narrow band
However different sectors are showing divergent movements
Midcap and smallcap companies are languishing with weak strength on the upside while frontline Nifty50 stocks are looking relatively
Trading individual stocks is better than taking any clue from the Nifty50 for trading
The indices are showing no clear sign of direction
Expectations for the weekThe market is just dragging its feet without any firm footing on either side
International news flow has been pretty active to which the market should react
The market will react to the outcome of the OPEC meeting, as crude oil prices will dance for a while
IPOs that closed on Friday are expected to deliver listing gains and retail investors should book profits on listing.
Key economic data will
have symbolic value at this stage
The market is expected to oscillate without any meaningful direction
Investors should stay on the sidelines and wait for deeper correction to bring in fresh money.
The Nifty50 closed for the week at 10,821,
down marginally by 0.04 per cent, from the previous week.
