The first blockbuster result of the third quarter set the mood for another exciting results season. Evidently, the performing companies are set to meet analyst and investor expectations.
The prospect of exceeding expectations are however not as promising. The markets seem to know this well. Retail investors seem to be more enthused about the quality companies, while the institutional investors are targeting cyclical stocks.
The search for returns gets all the more complex as valuations are already high and opportunities scarce. The hunt for returns seems set to continue and this should see significant rotation of themes.
The markets are likely to focus on results and reforms even as we head into the budget on February 1st. With benchmarks showing significant performance, active managers are gradually feeling the pinch in delivering investment performance.
This trend will weigh heavily on behaviour with investment anxiety set to rise though January. The market is gradually seeing easy buy-in of consensus as well as willingness to go contrarian. Overall, the pressure to deploy money is likely to remain high through January.
