2012 ENDS WITH A SENSE OF OPTIMISM

By Ruma Dubey

2012 for the stock market has ended. And ending 2011 in the red, 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, 2013 promises to be even better.

Three things make a market – earnings, valuation and sentiments. Yes, earnings have taken a beating and but going ahead, things are expected to look up. Sentiments? Well, it is down today but it will take only one or two strong sops from the Govt, followed with solid implementation and we could see a complete reversal of moods. Yes, RBI will also help by bringing down the interest rates. If nothing else, at least the year ended with inflation at a 16-month low. And that leaves us with valuations. Now that is one factor going in favour of the market. Many stocks are at attractive valuations and in the coming days, we could see long term investors finally seeing their patience getting 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 2012, despite the circumstances, ended in the green.  And the first day of every new year, always opens higher. 2012 ended better and let’s keep the hope alive that 2013 will end on a historic high.