With the earnings season and the Union Budget just round the corner, the equity markets are likely to remain volatile through 2018, says Tushar Pradhan of HSBC Global AMC. “I think what will happen of course is that there is going to be some volatility; I believe that is because of all the news flow which is so now I would think jammed up in the first half of the year. So you have got a Budget coming up, everything to be curious about what the slippage is all about, you have got a lot of elections coming through the entire year as such that will always lend some volatility,” the expert told CNBC TV18 recently.
Taking stock of equity returns in the last year Tushar Pradhan said, “What happens to the fiscal situation is a concern for the market and it does react in the short term though. But we have had record high fiscal deficits, high interest rates and inflation earlier, but the compounded return of equity during that period was very good,” Tushar Pradhan, CIO, HSBC Global AMC-India told the channel. So, from a long-term perspective, the equity market may not be impacted by fiscal slippage.
Even though fiscal deficit may expand further, economic growth will also improve as the year moves on, told Pramod Gubbi of Ambit Capital to ET Now. Pramod Gubbi is confident of a strong earnings recovery in the year ahead. “We look at a 7% GDP growth and nearly 15 percent earnings growth for FY19,” believes Pramod Gubbi. He also expects the corporate lenders to do well in Q3 OF 2018.
After India Inc posted better than expected returns in the second quarter, Abhimanyu Sofat of IIFL said that the earnings momentum is likely to be better in the coming quarters. In an interview to ET Now, Abhimanyu Sofat ,VP- Research, IIFL said, “After a long time, we are going to hit double digit earnings growth. We look quite optimistic about the future in terms of earning momentum where the consumer cycle also improves with the shift from the unorganised to organised as well.”
The equity markets closed at record high levels today. The S&P BSE Sensex clocked as much as 221 points to hit a fresh all-time high of 34,374.85 while the wider 50-share index Nifty added 64.35 points to mark the record high of 10,623.2. Indian stock markets surged to record highs very quickly after opening on a higher note on Monday with the broad market indices of NSE such as Nifty Next 50, Nifty Midcap 50, Nifty Mid100 Free, Nifty Sml100 Free, Nifty 100, Nifty 200, Nifty 500 rising in a range of 0.4% to 1.5%.