Sadly, no such rush is likely to be evinced in the markets given the realisation in everyone’s minds brought about by extreme caution and fatigue from 5 years of a on and off recession and not much progress for India on the growth front.
However, markets are likely to continue in the green given that the cyclicals have definitely resumed the lead, allowing the still hit sectors to continue the second half of the fresh baselining of market valuations meaning defensives and construction stocks that could not get a look in get into position for also being part of India’s revived growth.
Cement picks could however still be dicey to keep in ones trading stock and one should stay with cyclicals that are already in the winning habit. GMR Infra would need to replace JP group in many portfolios with their exit from more Power projects and continuing commitment to reduce debt (and revert to real estate project business) US Q2 GDP points to a rosy business cycle growing out of the leading rally but rate cuts are further down the cycle well into next year and euphoria is not advised.
We see a revert from 7800 levels again unless 7900 is breached and market indeed heads for 8000 in the new series. A reversal in the new series ( unlikely , <5% ) is going to take the market back to 7500 levels. However till the market breaks 7800 decisively the market would continue to rest till 77000 levels (26000 on the Sensex)