In general 2014 appears quite optimistic as far as performance of Indian equities are concerned. 2013 witnessed some major shocks in terms of currency, inflation and deficits which resulted in whipsaw movements in stocks and indices. Gross Corporate earnings in India has also not been encouraging so far. But in-spite of all bad macro and micro news flow in 2013, most of markets globally including Indian markets made new highs. Mutual funds sold more than Rs.75,000 crores worth of stocks in the year gone by while FIIs continued to pump in money and bought more than Rs.1 lakh crores worth of stocks.
During second half of 2013, QE tapering risk kept emerging markets on edge as none of us were able to estimate the impact it would have on capital markets. Finally after lot of suspense the QE tapering did happened and fed reduced the bond buying program by $10 billion. The market reacted positively as the quantum of tapering was low and it also signalled improvement in U.S economy.
So what to expect from Indian equites in 2014?
In a straight answer to this question, 2014 is expected to be optimistic and scale new high. But there will be no straight line movement and we will witness occasional correction on account profit bookings and unknown fears.