Markets to Rally

The positive corporate earnings are one of the main reasons for the main reasons which will pull the market up in this quarter. The major negatives for the markets are the increase in the global crude oil price. The crude oil prices have now touched $ 78 from close to $ 70 some time ago. If the crude oil touches $ 70 then we might see some type of rally taking place.

In this quarter also we blessed with strong corporate results. Infosys from the IT lot increased its earnings guidance. In the next few months we are going to see a restructuring of portfolios by the global fund managers. Another major change that took place in the global market was the hike in the interest rate by the bank of Japan by .25%. This ends the 0% interest rate policy that was adopted by the Japanese government. The Japanese investor would now withdraw their money and start investing in their local market. There would be significant appreciation of Yen due to change in the interest rates. We are already seeing a selling close to $ 200 billion by the Japanese investors so far this year.

US rates hike cycle seems to be nearing its end, this is another positive for the stock markets. But on the negative side the inflation just crossed 5% and a year end figure of 6% is very likely according to estimates. Still the long term fundamentals seem intact with the economy growing at close to 8%. India is amoung the top 2 destination for investment in the emerging markets. Let us hope that we won't see serious correction for the rest of the year with sensex closing for the year end arround 9,000 to 11,000.