2013 – Year of Equities

With the bullish stance continuing in the market, the year 2013 is expected to be the year for the equities as opposed to fixed income assets.

In a recent survey conducted among the analysts working in the Indian stock market, around 88% of them expects the year 2013 to give high returns in the equity market. A return of around 10-20% is expected to be seen for the majority of the people investing in stocks. (Source: Moneycontrol.com)

Factors for the Bullish Market

Macro factors in favour of the bullish market:

• Indian economy is currently facing five litmus tests. These include the Index of Industrial Production (IIP) data, monthly inflation, key bills in Parliament, US QE III and the Reserve Bank of India’s monetary policy review.
• The changes and the policies implemented in these fronts would decide the fate of the market in the coming year.
• Being an import driven economy, the deficit remains a worry for most stakeholders.
• Adding fuel to the fire is the depreciating rupee which remains a concern. Depending on India’s external sector reforms which are expected to change sometime soon, will help the market gain momentum.
• Inflation is again an issue for majority of the people.

Despite so much worries regarding the performance of economy, the FDI in Retail and Aviation sector helped economy to grow at an acceptable rate. The slashing of Interest rate, issue over CRR and other factors like CAC etc. are some of the areas which would help the markets to be positive.

Also Read about Asset Management Companies in India.

Finance, Banking, Infrastructure, Exports – Other Growing Sectors in 2013

1) The finance and banking sector is amongst the most sought after sector in the Indian economy for the coming year. Owing to the fact that the central bank of India, the RBI and the finance ministry have taken several steps to boost the growth in these sectors, the effect of the same is expected to be seen in the coming year.

2) Infrastructure sector too was seen as one of the major bet for many analysts. The recent debate on giving the housing sector the status of infrastructure would help boost the economy while lowering the price and cost in the housing sector.

3) Exports – Looking at the positive measures taken by the Industry and commerce minister Anand Sharma, to provide incentives on the exports will help lower the BoP CAD (Balance of Payment Current Account Deficit). It is reported that the current fiscal deficit of 5.4%, is the all time high deficit for the Indian economy, higher than the expected deficit of 4.9%. In the previous quarter the numbers were recorded at 4.4%.

4) The rising disposable income and the increasing consumption spending, are helping the growth in the consumer goods sector. Also the reforms of interest rate and subsidy relaxation announced by the commerce ministry might help the nation boost its exports which would help in strengthening of rupee over a period of time, provided the exports level are improved significantly in due course of time.

Conclusion

Thus the Indian economy has performed better as compared to other economies like US and economies in 17 nation euro zone, in the year 2012 and has achieved moderate growth. The growth is likely to increase in the year 2013 and would result in highly efficient and effective capital market, thus giving a chance to the investors to enjoy over the equity investments. In a nutshell, we can very well say that the year 2013 is the year of equities – which would help the Indian economy grow and also the investors grow rapidly.

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