INDIAN CORPORATE MONSOON TO DROWN WESTERN SHOWERS

While I was going through hibernation last month, rest of the world was moving pretty fast. Don’t worry I didn't go through low body temperature or slow heart rate, just a state of inactivity. But there were lot of melting moments in the scorching month of May, SEBI tightening P notes, government re-writing Mauritius treaty and of-course our RBI governor’s re-appointment for which at least Indian corporate may ask for a referendum.

The fourth quarter results which are still pouring in gave the needed relief to investors even before rains arrive as FMCG companies gave encouraging numbers, not to forget heavy stalwarts like Hindalco, L&T, Tata Motors, Airtel and the usual upbeat private sector banks. Public sector banks are also witnessing recovery encouraging long term investors to go for value investing. So do we need core sector or IIP numbers which are usually contradicting GDP data.

Though Indian monsoon is expected to hit in the second week of June, for rest of the world there might be beginning of financial drought and upheaval for emerging economies as US prepares for its second rate hike. Europe with its first quarter growth at 0.5% compared with 0.3% in the previous two quarters is exhibiting signs of gentle recuperation. Rising oil prices have further fuelled inflation hopes of depressed western economies. Thus what we need is getting equipped for a more turbulent financial scenario at least in the short term, the contours of which would be evident in the upcoming OPEC, ECB meet tomorrow and FED meet in the third week of this month.  All of this including the British referendum is going to keep everyone busy. For us monetary policy on 7^th June would be keenly followed both by economists and political analysts for future projections. Come what may we have steadied our boat, we just need to follow the North Star. And for retail investors follow the fundamentals, as fundamentals create wealth.