Investors who might be looking to have a go at the market, buoyed by the bullish sentiments expressed by various talking heads in the TV news channels despite the benchmark indices trading at all time high levels, may want to rethink their decision, as CLSAs outlook for the next 12 months isn’t too encouraging. “Don’t see a significant upside from here on for next 12 months,” CLSA told ET Now. The brokerage and investment firm believes that Indian markets will grow at low double digit growth in the next one year.
Moving on to the outlook for various sectors, CLSA pointed out that IT has become a low growth sector, and investors should not expect double digit growth going forward. Infosys and Tata Consultancy Services stocks have had a poor run at the bourses in the year with returns of -10% and -5% respectively. CLSA predicts that the growth will be 6-8% going forward. The firm advised the investors against holding on to IT stocks for a period of more than 3 years.
According to the firm, pharma space may bottom out in the next 6 months. The Bse Healthcare Index has plummeted by nearly 15% in the year.
As per the estimates of the firm, the mortgage industry is set to grow at 15-20% in the next 3 years. The firm expects this growth on the back of increasing penetration. Not all is bleak, as the firm expects cyclical stocks such as capital goods to outperform the benchmark, as India is at a cyclical low, and CLSA expects a bounceback going forward.
The equity benchmark Sensex closed 260 points below the previous close at 32,014. This is the lowest close in the last two weeks. Nifty closed below 10,000 at 9,978, down by 78 points since the previous close. It had been a weak trading session today, with financials dragging the indices. Realty stocks ended in red with HDIL and DLF falling 19 and 7 percent, respectively. This was the first time in the last nine trading sessions that Nifty ended below the 10,000 mark.