Samvat 2071: Microsec handpicks 9 stocks for investment

Diwali Picks 2014 by Microsec

Samvat 2070 had a stellar performance with Nifty gaining 25% during the period to date, and keeping to its tradition of outperformance, Microsec Research recommended stocks have returned 37.4% average returns during the same period. We held the view that cyclical sectors would outperform because of their compelling valuations a year back and we have seen significant returns from quality cyclical stocks in past one year.

Samvat 2071 is a beginning with India being in a sweet spot. India has a stable Government with mandate to take bold decisions to prop up the economy, decline in crude oil price ( Brent ~85/barrel against %101/barrel a year back) as India imports ~80% of crude oil, the targeted increase in diesel prices have come to an end, easing inflationary trends arising, visibility of gradual decline in CPI and WPI, low trade deficit, stable INR and strong GDP growth revival visibility.

Microsec Research believes that Samvat 2071 has surprises in store as India’s inflation is likely to decline sharply giving room to Monetary Policy makers to cut interest rates and propel India’s growth. Our expectations on inflation underpin from the fact that the targeted diesel price hikes put into effect in Sep 2012 has finally ended. The sharp increase in diesel prices over last two years had vicious impact and increased prices across the board. Hence higher base affect, decline in crude oil and commodity prices may sharply bring down inflation, triggering a rate cuts and boosting demand across sectors.

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