The Nifty is likely to hit 10,300 -10,400 level this fiscal amid positive market sentiment, the expectation of the continuation of reforms, GST implementation and favourable monsoon, brokerage firm HDFC Securities has said. “Trajectory is positive and we are moving towards 10,300 -10,400 levels of Nifty but we have to see whether it will come with correction or it will straightaway go there,” Dhiraj Relli, MD & CEO, HDFC Securities told PTI. The brokerage firm said that markets are looking positive and has responded positively to the structural reforms done by the government in the last three years.
“We have seen earnings improving in Q4. We have seen that mother of all reforms is on anvil, which is GST. We are seeing that we will have a steady GDP growth in India. So, macros are all in place. “The government has adhered to the fiscal prudence. Keeping in mind all these macros in place and positive monsoon, we are heading for an earning upgrade and it will definitely lead to increase in multiples that will drive the market,” he said.
The trajectory is looking very positive, so the market is moving up in the calendar year 2017. Having said that, we may see correction and if at all we see a correction that will be healthy, Relli said, adding that there can be a global sell- off that can have a short-term impact.
On the reasons for optimism in the market, he said, “People are feeling that the government is adhering to structured reforms and will continue this process. GST implementation will drive higher GDP growth and sales of the organised sector than the unorganised sector. So, this would drive earnings. Lower crude prices is also one area which will help margins to sustain for most of the sectors”.
On the Goods and Services Tax, he said, “GST is going to be disruptive at least in Q2 because we are seeing lot of stocking and restocking happening, it could lead to preponing and postponing the buying decision, to that extent it is disruptive for the Q2”. “However, in the long run, it will have a positive impact on the GDP growth. The devil lies in the implementation, if the execution is good then it will have a long-lasting positive impact,” Relli added.
GST will be rolled out from July 1. About the immediate triggers for the market, he said, “The single largest point which market is looking at is the implementation of GST. How disruptive it is, how much benefit it brings on the table and what kind of impact it will have on the market.
“Mid next month onwards, we will start getting earnings for the quarter 1 and the trend will start appearing then, giving cues about the market. And third, there will be a monetary policy in August as well”.