WISHING ALL OUR CLIENTS & ASSOCIATES
A VERY HAPPY & PROSPEROUS
DIWALI
TEAM V CLIENT WEALTH
Monday, October 24, 2011
Market Outlook - Oct , 2011
Market Outlook
The month of September saw sideways movement in the equity market after steep fall in previous month but huge correction was seen in metals and other commodities. Gold fell by 6% in the month while dollar strengthened. Crude oil corrected from 86.85$/barrel to $81.86/barrel as worries remain about global economic slowdown. FII and DII remained net sellers in Indian
equities for the month.
We remain cautious on equity markets for the next couple of months as inflation is not coming
down and global concerns remain there but market volatility is likely to subside in couple of
months and market will form a bottom. Equity market has already discounted US slowdown but
problem in Europe is not fully discounted as extent of the problem is not known. We find
valuation of Indian equities attractive and believe that long term investment will yield very good
returns. Investors should avoid lump sum investment in equity market at this point of time and
invest in staggered manner. We hold our advice to investors to keep buying equity mutual funds
through SIP/ STP route to generate wealth over the long term.
On debt side we continue recommending FMPs as Bank CDs and other CPs are available at very
attractive rates and locking these papers in FMPs will yield good returns.
We maintain our view to hold 10% allocation to gold in the overall portfolio. Gold saw sharp fall in the last month but believe it is a good time to accumulate gold as there is still more upside left in gold prices.
The month of September saw sideways movement in the equity market after steep fall in previous month but huge correction was seen in metals and other commodities. Gold fell by 6% in the month while dollar strengthened. Crude oil corrected from 86.85$/barrel to $81.86/barrel as worries remain about global economic slowdown. FII and DII remained net sellers in Indian
equities for the month.
We remain cautious on equity markets for the next couple of months as inflation is not coming
down and global concerns remain there but market volatility is likely to subside in couple of
months and market will form a bottom. Equity market has already discounted US slowdown but
problem in Europe is not fully discounted as extent of the problem is not known. We find
valuation of Indian equities attractive and believe that long term investment will yield very good
returns. Investors should avoid lump sum investment in equity market at this point of time and
invest in staggered manner. We hold our advice to investors to keep buying equity mutual funds
through SIP/ STP route to generate wealth over the long term.
On debt side we continue recommending FMPs as Bank CDs and other CPs are available at very
attractive rates and locking these papers in FMPs will yield good returns.
We maintain our view to hold 10% allocation to gold in the overall portfolio. Gold saw sharp fall in the last month but believe it is a good time to accumulate gold as there is still more upside left in gold prices.
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