Admin Admin Sep 03, 2018 11:25 AM Other Shares Tread with caution going ahead; bet on these 2 stocks for double digit returns The Indian economy grew 8.2 percent in April-June this year, the highest in two years, amid signs that households are buying more, and companies are adding capacities, shrugging off the disorderly effects of the twin shocks of demonetization and the goods and services tax (GST). Domestic air passenger traffic, robust rail freight movement, rising sales growth of passenger vehicles and strong consumer durables sales also point to a turnaround in the greater household spending. The monsoon rains, critical for the summer-sown Kharif crop, have been slightly below normal this year so far, particularly in the grain bowl states in north India, but the shortfall isn’t alarming enough to pull down growth in the broader economy. India also cemented its status as the world’s fastest-growing major economy, ahead of China, which grew 6.7 percent in April-June 2018. At the current pace, India looks set to become the world’s fifth-largest economy, ahead of the United Kingdom. Despite GDP showing good strength, the perils like rupee trading at record low against the dollar and high crude prices can have a huge bearing on the fiscal deficit which can eventually dent market sentiment. We believe markets may come under pressure due to sliding rupee and burgeoning fiscal deficit. We recommend a cautious approach. Going ahead, we believe, the progress of ongoing monsoon, rupee movement against the dollar, volatility in oil prices, trade war tensions and US Fed meeting on rate hike will keep domestic bourses volatile. We believe that the investors can have a stock-specific approach. We still believe that there is significant value in midcaps after the recent correction seen in the implementation of ASM and announcement of LTCG in Union Budget 2018-19. Midcap stocks did show some signs of bottoming out in August but it will be difficult to say that the pain is over and stock selection will be the key.