8 Dec 2016

Recovery in corporate earnings

A sustained recovery in corporate earnings has probably been postponed by a couple of quarters because of the currency note disturbance. The effect on GDP growth will probably be in the range of 1-1.5% on an annualized basis. The outcome is already well-trailed though: a significant boost to online businesses and the organized sector; acceleration in growth from execution of deferred purchases followed by a recovery to previous growth levels as the fundamental growth story regains traction. The market is holding around the 8,000 level and this may turn out to be a good entry point, in the absence of other outstanding opportunities for investors.

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