What is the future course of the Indian stock markets?With an investment horizon of next 12-14 months we have a fairly positive outlook on the stock markets. The Indian stock markets are getting more globalised. If you look at the peer group stock markets we are one of the best emerging markets in the world. We are attracting some of world’s biggest investors in the stock markets. Why the sudden increase in interest by FIIs in markets?Good monsoon, softening oil prices, passing of the Union Budget and expected encouraging second quarter results from Indian corporates has revived FII confidence on India’s economic growth. In September alone, the FIIs have poured about Rs 2,000 crore in Indian stock markets as valuations of Indian corporates are very attractive. Have any fundamentals changed to warrant such a turnaround in sentiments?The fundamentals of most of the Indian corporates continue to improve and remain very strong and healthy. Indian companies are increasing profits at the rate of 28-30 per cent per annum which are at a record high. The stock markets should also go up in the same rate though that is not happening. What do you suggest a small investor should do in these markets?Small investors should stay invested in fundamentally strong companies with an investment horizon of 12-24 months. This is not the time to sell as we are expecting the markets to do well in the next six months till the Budget. Which sectors do you expect to fuel the current stock rally and why?For the next 12-24 months we have a positive outlook on sectors like cement, hotels, automobiles and auto ancillaries, and pharmaceutical industries. For the first time, cement prices did not fall during monsoon and the government is committed to invest in the housing and infrastructure sector. Similarly, hotels’ occupancy rates are at its peak. The coming season will be one of the best for the industry. The automobile success story is quote well known. Indian companies have lined up a slew of IPOs in the coming months. How will the IPOs fare? Should a small investor get into the IPO bus?The IPOs of strong fundamental companies are expected to do well. Hence, small investors should choose only those companies to invest which have strong fundamentals. In the next six months, Indian companies will raise close to Rs 15,000 crore from the primary markets. This is good opportunity for small investors to buy shares at offer prices.
