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Post BREXIT…..

brexit

BREXIT was a shock to the markets on Friday morning because markets closed pretty much positive on Thursday. The sharp recovery after the shock in the same session though gives a relief that there is not much damage caused; it has shaken the beliefs of the traders whose activity is most needed for the markets to function.
Due to this high impact move last Friday SENSEX is likely to be on sideways range for a good amount of time. Automobile stocks have begun to move out of the portfolio because Europe was a bigger market for this sector.
Our markets are stronger when compared to the other emerging markets which will force fund flows that will keep the prices rising. There can be new sectors and leaders in those sectors that will begin to dominate in the performance in the coming months.
Infrastructure stocks are showing strength on their balance sheets as well as on their stock prices. There are likely chances of the Infra sector taking lead in the next rally are higher.
In our portfolio, though we have been adding new stock and increasing exposure, having a near 60% exposure into Equity and the rest of the capital parked in debt is helping us protect the impact of volatile market moves.
For the month of June we have had 2 negative news flows, Raghuram Rajan exit which was a kind of shrugged off and BREXIT which had a hit. Like how we have day and night in a day, markets also should have ups and downs, only then the fatigue of the earlier day can be overcome and new opportunities can be identified to have stronger growth to our savings.

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