2013 ENDS IN THE GREEN - HOPE 2014 IS GREENER!

By Ruma Dubey

2013 calendar year for the stock market has ended and thankfully, it ended in the green, though the smallest gain since 2005. Yet, it’s a gain and not a loss. The last time the market had ended in red was in 2011, when sentiments were at rock bottom.

And ending 2013 in the green, the market has shown a sense of optimism and ended the year in the positive. This clearly means that compared to 2011, the sentiments are much better this year and looking ahead, 2014 promises to be even better.

Three things make a market – earnings, valuation and sentiments. Yes, earnings have improved in Q2FY14 compared to Q1FY14 and even better than Q2FY13 and going ahead, things are expected to look up. Sentiments? Well, it is much better today than what we began the year with. Looking ahead into 2014, it is only expected to get better, what with elections around the corner and many sops expected to be announced. If the election gives a clear mandate, we could see rampaging bulls! Yes, RBI will continue to keep its hawkish stance on inflation; growth is suffering but interest rates are not expected to come down in any tearing hurry. And that leaves us with valuations. Now that is one factor going in favour of the market. Many strong stocks are still at attractive valuations and in the coming days, we could see long term investors finally seeing their patience being paid off.

A good year makes us look forward to the New Year, with hopes that it will bring in good cheer. So keep the cheer and keep the hopes up. Take a look at the table given below. Statistics never lies and what we see is that every year, despite the circumstances, ends in the green.  And the first day of every New Year, always opens higher. 2013 ended better and let’s keep the hope alive that 2014 will end on a historic high.