Market Strategy

Monthly Strategy Monthly Strategy Monthly Strategy

July 5, 2011

July 05, 2011

Monthly Strategy

Table of Content

House View...................................................................... 3 Global economy ............................................................... 4 Global equity markets: Mixed performance...................... 6 India: Slowdown in economic activity visible… .............. 7 Equity investment strategy: Time to utilise volatility to build portfolio… ............................................................... 8 Direct Equity Model Portfolio............................................ 9 Equity mutual funds model portfolio............................... 13 Debt investment strategy: Trade-off remains favourable at shorter end..................................................................... 14 Debt funds model portfolio ............................................. 16 Commodity: Volatility increases on news flows............. 18 Bullion: Consolidation in the making… .......................... 19 Product ideas ................................................................. 20

Analyst’s name

Sachin Jain sachin.ja@icicisecurities.com Sheetal Ashar sheetal.ashar@icicisecurites.com

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Monthly Strategy

House View

Equity

A lot of bad news has already been discounted and long-term investors may be better off accumulating at current levels and at any correction, which the market may witness in the shortterm…

• Short-term concerns in the form of news flows emanating from developments in the European sovereign crises and slow economic recovery in the US may lead to higher volatility • Although some tail risk remains due to macroeconomic headwinds, most of them have already been discounted in the price • By the end of 2011, we are likely to be at higher levels as the markets are trading at a P/E of 15x current year FY12 earnings, the lower end of the historical (14-17x). After six to nine months, the market...