While there might be some concerns about the pace of the rise in the Indian stock market and overvaluation in the key indices, experts feel the underlying factors are strong enough to justify it, and that there is much further upside left.
Indian stock markets are on a continuous rising streak since the beginning of 2017. The key equity indices Sensex and Nifty have returned up to 24% so far in the current calendar year. With these returns, India’s stock market is one of the best-performing markets among the major economies of the world, if we look at returns of 2017. Domestic markets have also marked some of the major milestones this year with Nifty breaching the five-digit figure of 10,000 and Sensex which is about to cross 32,700. This year has been a record-breaking for the IPO (initial public offering) market also with GIC Rs 11,370 crore and SBI Life’s Rs 8,400 crore public offers. Collectively, companies have raised nearly Rs 50,000 crore from the IPOs this year.
If we take a look at the stock markets around the major economies of the world, Indian benchmark index Sensex had returned 22.43%; Nifty 50 had jumped 24.82%; United States’ Dow Jones Industrial Average had gained 17.77%, tech index Nasdaq composite had returned 22.36%; Japanese Nikkei had advanced 14.08%; China’s Shanghai Composite index had zoomed 8.97% so far this year. Indian markets have also outperformed European markets with Britain’s FTSE 100 up 5.34%; Germany’s Dax up 13.26%; France’s CAC 40 up 10.79% so far this year. Only Hong Kong’s Hang Seng has performed better than the Indian market among the major economies, with the index returning 27.85% in 2017 so far.
While there might be some concerns about the pace of the rise in the Indian stock market and overvaluation in the key indices, experts feel the underlying factors are strong enough to justify it, and that there is much further upside left. Sandip Sabharwal, Fund Manager at asksandipsabharwal.com says that any market correction may attract new investment into markets. A possible market correction is likely to attract new domestic investment into the markets and Diwali selloff is an opportunity for markets to move to new all-time high, Sandip Sabharwal said in an interview to ET Now. He said that automobiles and consumer durables have seen a strong sale and their stocks should do well going forward.
Sabharwal is not alone to be believing in the stellar Indian stock market story. Earlier this month, the global investment bank and brokerage firm Morgan Stanley from kept the hope alive which had earlier predicted Nifty to nearly triple to 30,000 points in five years, expects Sensex rising to as much as 1,30,000 points in a decade from now in the bull case scenario, as it expects India to go on to become the third-largest economy.