After touching the life-time high of 30,000 level, experts believe stock markets would continue their upwrad movement, driven by factors like corporate earnings, fund inflows and key reforms. The BSE Sensex, which was on a record-setting spree, closed above 30,000 level on Wednesday on the back of global cues, strong economic fundamentals, and unabated funds inflows. An impressive show by the ruling BJP government in Delhi MCD polls on Wednesday also boost the market sentiments.
The BSE 30-share Sensex opened on a strong note on Wednesaday and climbed to a lifetime high of 30,167.09 points intra-day, before closing 190.11 points up at 30,133.35, while NSE Nifty also scaled a new high of 9,367 before closing 45.25 points up at 9,351.85.
“The Sensex touched the coveted levels of 30,000 on Wednesday buoyed by the anticipation of strong economic and earnings growth going ahead. One needs to understand that the Indian economy is on a strong footing with relatively strong macroeconomic fundamentals, lower inflation/interest rate regime, possibility of a major reform such as GST and a favourable demography supporting sustainable growth,” Pankaj Pandey, Head-Research, ICICI Direct.
Domestic markets’ Wednesday’s performance was in line with their global counterparts, which has been on a rising spree following victory of centrist Emmanuel Macron in French presidential elections.
Sensex on Thursday opened flat but remained in the 30,000 level. At 9.38 am, Sensex was trading 37.85 points down at 30,095.50, while NSE Nifty was trading 3.15 points down at 9,348.70.
Experts believe the market upward momentum would continue going forward and factors like corporate earnings, fund inflows and key reforms would drive the markets. Prasanth Prabhakaran, Senior President & CEO, YES Securities India Limited said, “We believe the markets should continue their upward trajectory on the back of improving fundamentals, implementation of key reforms especially in the banking sector, easing inflation and improved order flows. In our opinion it is the investment opportunities that matters and therefore putting a number on market levels is not that important.”
ICICI Direct Pankaj Pandey further elaborated on this and said, “While the current index levels of around 30,000 of Sensex looks optically high given corporate flat earnings trajectory over last 3-4 years (FY14-17E) amid delay in revival of private capex cycle, we must make a note that markets discount future earnings and growth potential.” So what will drive the markets going forward? Earning growth would be the key factor driving the markets from hereon. Fundamental factors such as stabilised commodity base, upbeat consumption and most importantly, a favourable low base, the earnings from hereon, could witness a strong double digit growth recovery in FY18E and thus drive the market momentum.