Falling trend in GDP, investment and co. earnings growth to reverse during 2014, CLSA says in investor note dated yesterday.
Policy environment started improving since last 15 mos.,
2014 will see positive impact, analysts Mahesh Nandurkar, Abhinav Sinha and Rohit Kadam write
Investors to position much in advance for improvement even as it will be visible in 2H of 2014 and fiscal yr 2015
CLSA sees market ?¡ãdeveloping patience?¡À towards companies benefiting from recovery
Recommend cyclicals such as Axis Bank, ICICI Bank, Maruti Suzuki, UltraTech, power utilities, mid-cap property stocks HCL Tech, ITC, Lupin and Zee Entertainment are other buy ideas
?CLSA underweight on staples, retail financials
2014 is going to be a big year for India as the prospect of a reform-minded prime minister, with a track record of delivering on economic growth, is priced in. However, while this would be a heartening development for investors who have been waiting for a bullish catalyst, the success of the RBI in defending the Rupee is likely to be no less important.
The US Dollar hit a medium-term peak near INR69 against the Rupee in September and has since pulled back to range above INR60. It will need to continue to hold below INR64 if foreign investors are to have confidence that the central bank remains committed to battling stubbornly high inflation.
The Nifty Index continues to consolidate in the region of the 2010 peak and a sustained move below 5800 would be required to question medium-term scope for a successful reassertion of medium-term demand dominance.