The Sensex and Nifty’s closing at an all-time high on Friday could just be the beginning of good times for Indian stock market investors, according to an FE poll of 10 leading market participants.
While some see the indices rising 25% in the next two years, others say the Nifty could touch 20,000 by the end of FY24.
Andrew Holland, CEO of Avendus Capital Public Markets Alternate Strategies, said, “We expect the Nifty to touch 20,000 by the end of FY24, which is a 6.6% upside from the current levels.”
UR Bhat, director of Alphaniti Fintech, added, “We have been seeing sustained FPI (foreign portfolio investors) buying in Indian equities. India is a bright spot among emerging markets, and a lot of money that could have been directed to other emerging markets such as China is making its way to India.”
According to Nilesh Shah, MD of Kotak Mutual Fund, the momentum of markets is being driven by expectations of superior long-term growth. As long as India can deliver on earnings, governance, and green transformation, indices will continue to deliver.
Vinit Sambre, CIO of DSP Mutual Fund, is encouraged by the good Q4 earnings numbers and believes that the softening of commodity prices augurs well for future corporate earnings.
Shiv Sehgal, president & head of Nuvama Capital Markets, said, “Most important is the commodity price pressure, which hurts domestic companies’ margins. That clearly seems to be ebbing. Also, the aggressive rate hikes by central banks had a big dent on valuations. That is now largely behind us.”
Another important point
highlighted by DP Singh, deputy MD of SBI MF, is that with newer companies coming up and hitting the markets, there is increasing interest in the mid-cap and small-cap counters, as reflected by those indices.
Deven Choksey, founder of KR Choksey Group, said the economic growth reflecting in market performance is due to India faring well on the economic and corporate balance sheets, which is, in turn, reflecting in the consumer balance sheet. He said everyone is deploying money for growth and to spur consumption.
Rahul Singh, CIO – equities of Tata Asset Management, pointed to the revival of the investment cycle and India’s gradual emergence as a new sourcing hub as important factors that may drive above-par GDP growth and earnings growth of about 15% over the next two-three years.
However, while everyone seems bullish on the Indian economy, the global environment still remains suspect. Vijay Kedia, independent market analyst, said that while India seems to be in a sweet spot compared to countries like Germany, whose indices continue to be high despite the economy having slipped into a recession, a sell-off in foreign markets could adversely impact India as well.
Sambre believes that the global landscape, with regards to possible rate hikes and any surge in crude prices leading to rising costs, could lead to negative market sentiment.
The Indian elections could also be key to continuing positive market sentiment. Both Choksey and Deepak Jasani of HDFC Securities believe that uncertainty around Indian elections could make markets nervous going ahead. Bhat said, “Typically, the year before general elections haven’t been good for the markets because of the uncertainty around who will form the government.”
