Indian equity markets entered the new financial year 2017-18 with a bang, with the benchmark stock indices Sensex and Nifty closing at record highs yesterday. BSE Sensex ended trading at 29,910 points on Monday, rising 1% from the previous close, while NSE Nifty closed at 9,237.85 points, up 0.7%. The market breadth too looked extremely healthy on BSE where out of 3,026 shares, 2,068 advanced, 809 declined and 149 remained unchanged. Gains were largely seen in capital goods stocks, pharma stocks and energy stocks. Likewise S&P BSE Mid Cap rose by 0.66% while the S&P BSE Small Cap gained 1.3%.
The recent spurt in Indian stock markets is fueled by strong FII buying since BJP’s victory in UP state elections. Experts say that the foreign investors, who were cautious on investing in India since the demonetisation and the US President election results in November, have turned around and are putting in money into Indian equities on the back of the resilient economy and strong domestic fundamental factors.
Further, experts also suggest that despite being at such high levels, Indian stock markets still offer lots of investment opportunities for those who might have missed the rally so far, with plenty of potential upside.
Watch this also:
Goldman Sachs is bullish on Indian equities on the back of expected recovery in corporate earnings. The research and brokerage firm expects Nifty to reach 9,500 points in one-year, and further rise to 10,200 points by December 2018. It expects 12% corporate profit growth this year and 15% the next year. Timothy Moe of Goldman Sachs says the firm is also overweight on India as the medium-term reforms story shows promise.
Mitessh Thakkar, chief trading analyst at mitesshthacker.com, says that the Nifty may soon touch 9,350 levels provided it does not breach its breakout zone of 9,250 points. Thakkar suggests to keep holding long positions with a stop-loss at 9,200.
Another analyst Ajay Bagga forecasts the Nifty to shoot up before correcting a little and settling down. “Probably it (Nifty) could go up to 9,400 in a frenzy in the next couple of months or so if not earlier and then it would sit back and try and digest those kind of returns,” Bagga said to ET Now.
Veteran analyst SP Tulsian of sptulsian.com is confident of the market giving around 15% return on the index for the new financial year.