Why December Could Be A Great Month To Buy Shares?

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Indian stock markets are set to end the year 2015 badly. From 27, 545 points on Jan 1, 2015 on the Sensex we are at 25,530 points today. After almost a year, we are down 2000 points on the Sensex.

It's not been a good year for the Indian stock markets for a number of reasons. The biggest reason is that growth has not picked-up and corporate earnings have been poor.

Why December Could Be A Great Month To Buy Shares?
Foreign Portfolio Investors have been selling Indian stocks in the last few months, except Oct. Worries over China still continue and the reform process has been below expectations. Nobody knows what the fate of the GST Bill is going to be. The biggest risk for the market is the Dec 15 and Dec 16 US Fed meeting, where it is widely expected to hike interest rates. Here are some reasons to buy shares in Dec, 2015.

Markets are at the lowest levels

Markets are a few 100 points lower, than the lowest levels hit in Aug. This means you are getting stocks at the lower levels, than they were prevailing for most part of the year. Select stocks like TCS, ITC, ICICI Bank etc., are very close to 52-week lows. This makes it attractive to buy them.

US Fed meeting

One other reason to be buy stocks, would be that the headache over interest rate hikes beginning would come to an end on Dec 16. This is because the US Fed would begin the process of hiking interest rates and we could see a further fall in the markets. This means you are going to get stocks even cheaper after a week or so. The event would also finally end, which has left markets on the tenterhook.

Come Jan there could be a rally in stocks

In Jan, there could be fresh fund flow allocation and India might attract a lot of fresh FII money. This could lead to a rally in stocks early next year, which is why we think Dec would be a good time to buy stocks.

Clarity on the GST Bill

With the parliament session ending on Dec 23, there would be clarity on the GST Bill. If it does not sail through this year, we could see stocks crash landing, making them even more attractive to buy.

All in all, we see Dec as a month where you are going to get stocks even more cheaper, thus making it an ideal time to buy shares. In the month of Jan, there maybe some kind of rally, at least in the latter part of the month.

GoodReturns.in

Read more about: icici bank, tcs, shares
Story first published: Tuesday, December 8, 2015, 9:04 [IST]
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