Personal Views on Stock markets in India

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During my visit to Mumbai in October, I met with fund managers, most fund managers and some of the Gurus identified the price of oil (and $ /Rupee) as the single biggest risk to the markets.

My experience of having seen commodity cycles and having been a trader (many years ago) was that Oil will trade closer to $60 in 6 months and I would not be surprised even if it trades lower at $50  while the predictions were in the range of $ 80-100. While I was right on the direction but the decline in prices happened sooner than I had predicted.

Similarly, my view on INR was that Rs will trade close to 70-72 even though the predictions were for 76 or higher. I still believe in my gut.

One of my fund manager friends jokingly wanted to place a bet on my predictions since he believed he will win irrespective of the outcome even if he loses the bet because if the markets go up his investors will make money.

While most people link the performance of the markets to the outcome of elections but in my personal view, some crucial and landmark judgments by the supreme court in the run-up to the elections may impact the election results and therefore the market volatility. I have no doubt that in the long term, good stock selection will deliver great outcomes to investors.

October 2018