Met department has predicted normal monsoon this year. It follows the previous year which was also normal. This means big good news for the markets. We are going to see big gains coming…. Reason, farmers will have surplus income in their hands and will add to consumption. Rarely does such occurrences happen, where always there are drought conditions following one good or normal year of monsoon. Where our farmers clear off all their loans when there is normal monsoon and a fairly good crop. Now, if there is a second year of good income, where they will not have loans to pay, and can think of some luxuries for their families.
Once they have surplus funds, they will think of buying a new TV, automobile, renovate his home and more such goodies…. As their lifestyle improves, so will the economy. Businesses will have good sales, sectors like home construction, which already has a booster in the form of the Government’s “Home for all Scheme”, consumer goods and auto companies.
We look forward to have a great year for the markets. As this writing happens, the market is in consolidation, with no mood to get into correction. Mid caps, which were the stars as always have corrected to some extent. Sector rotation is happening, Sugar is showing signs of weakness, while banking is showing strength.
Good times ahead…….