Last 10 days have been time for some good amount of correction, not just in the Indian markets, but globally. In fact the correction has probably been instigated by the substantial fall in Crude prices, which are down by a whopping 40% in just the last 2-3 months. As we all know Crude does impact economies of almost all countries, either positively or negatively, and there is a lot of International money movement happening to take care of Crude payments. Hence the huge fall in Crude prices is even impacting the Currency rates across the globe. Add to all these factors the fact that the year-end Christmas vacation is approaching, which is a very important festival for most of the western world.
The NIFTY Index is today at levels around 8100, down by a good 500 points from the peak of little over 8600 it hit recently. Most of the Blue-chip stocks are down by around 10% or so, except for Bank stocks, which haven't corrected much. This is a very healthy correction. But as with any sudden correction, most Business News channels start talking all Negativity and predicting more downside in the markets. Remember all that talk is for short term traders.
Investors who have either a medium term or long term outlook, should take advantage of this opportunity and tank-up on their favourite stocks. The HUGE correction in Crude prices is a Very Very Very BIG Positive News for Indian economy. And reports suggest that the Crude prices could remain in the $40 to $80 per barrel range for the next few quarters. This factor alone will prove to be a big booster for Indian economy in the coming months. And hence it will be an excellent idea to buy stocks which can benefit from an expanding Indian economy.
The direct benefit of lower crude prices will be felt by companies which use Crude or it's derivatives as an Input/raw material, which includes industries like Paints, tyres, certain Chemicals & even Petrochemicals. Oil Refining & Retailing companies could also be amongst the larger beneficiaries. The secondary beneficiaries will be all those companies who spend substantial amounts on transportation of goods, either raw materials or finished goods. Almost all manufacturing companies & all Logistics companies come in this category as they have varied requirement of 'Transportation' in their business. Even Telecom tower companies who spend substantial amounts on Diesel to run their generators will benefit from this price correction.
The other part of this benefit is going to be the falling Inflation, which will not just help consumers spend more, but also will allow RBI to reduce Interest Rates in our Banking system, sooner or later. Here again all companies who borrow Capital from Banks, either for CAPEX or for Working-Capital purposes, will be beneficiaries. This benefit will be felt a quarter or two down the line. But it's coming for sure and will boost profitability of most companies.
Mark my words, Indian markets will be rallying in the near future, primarily because of Crude Oil price correction, provided the prices remain under $80 per barrel range for a substantial amount of time. And hence this correction is an excellent time to tank-up for good quality stocks.
The NIFTY Index is today at levels around 8100, down by a good 500 points from the peak of little over 8600 it hit recently. Most of the Blue-chip stocks are down by around 10% or so, except for Bank stocks, which haven't corrected much. This is a very healthy correction. But as with any sudden correction, most Business News channels start talking all Negativity and predicting more downside in the markets. Remember all that talk is for short term traders.
Investors who have either a medium term or long term outlook, should take advantage of this opportunity and tank-up on their favourite stocks. The HUGE correction in Crude prices is a Very Very Very BIG Positive News for Indian economy. And reports suggest that the Crude prices could remain in the $40 to $80 per barrel range for the next few quarters. This factor alone will prove to be a big booster for Indian economy in the coming months. And hence it will be an excellent idea to buy stocks which can benefit from an expanding Indian economy.
The direct benefit of lower crude prices will be felt by companies which use Crude or it's derivatives as an Input/raw material, which includes industries like Paints, tyres, certain Chemicals & even Petrochemicals. Oil Refining & Retailing companies could also be amongst the larger beneficiaries. The secondary beneficiaries will be all those companies who spend substantial amounts on transportation of goods, either raw materials or finished goods. Almost all manufacturing companies & all Logistics companies come in this category as they have varied requirement of 'Transportation' in their business. Even Telecom tower companies who spend substantial amounts on Diesel to run their generators will benefit from this price correction.
The other part of this benefit is going to be the falling Inflation, which will not just help consumers spend more, but also will allow RBI to reduce Interest Rates in our Banking system, sooner or later. Here again all companies who borrow Capital from Banks, either for CAPEX or for Working-Capital purposes, will be beneficiaries. This benefit will be felt a quarter or two down the line. But it's coming for sure and will boost profitability of most companies.
Mark my words, Indian markets will be rallying in the near future, primarily because of Crude Oil price correction, provided the prices remain under $80 per barrel range for a substantial amount of time. And hence this correction is an excellent time to tank-up for good quality stocks.
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