If India follows the normal economic cycle, equities may continue to perform individually but the other asset class such as bonds, Dollar index, treasures, etc, may also perform which may leave rupee under some depreciative pressure.
Jefferies' Nifty target of 15,800 implies a 20x 12M forward PE - 10 per cent derating from the current level
Indian share market benchmarks BSE Sensex and Nifty 50 ended the last trading day of Samvat 2076 with 10 per cent gains despite COVID-19 induced volatility throughout the year. Looking at the current gush of money coming into India and many foreign investors betting on the ‘India is the fastest growing economy’ story, Rajesh Palviya, Head Technical & Derivatives, Axis Securities, told Financial Express Online that the Nifty index is expected to touch 13,800-14,000 before next year’s Diwali. “Nifty has good support at 12400 followed by 12000 level on the downside. However on the higher side 13000-13200 may act as a resistance zone for this up move,” Palviya said.
How Indian share markets are expected to perform in Samvat 2077?
Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst, Gemstone Equity Research & Advisory Services, told Financial Express Online that going ahead India may witness a sectoral shift. “We may see the markets posting limited gains on both percentage and absolute terms in the range of 5-6 % over the next year,” he said. Vaishnav explained that if India follows the normal economic cycle, equities may continue to perform individually but the other asset class such as bonds, Dollar index, treasures, etc, may also perform which may leave rupee under some depreciative pressure. He expects the overall trading range of the markets to remain wider than usual. “The zone of 13200 and 13500 will act as stiff resistance if the upside continues with support at 12100 and 11650,” Vaishnav added.
Where do opportunities for investors appear in Samvat 2077?
In the new Samvat, Milan Vaishnav said that it would be positively risk-rewarding if the investors this time focus more on large caps than on mid and small caps. “We will see traditional defensive sectors like FMCG, Consumption, IT, and Pharma relatively outperforming the general markets,” he added.
Rajesh Palviya believes that in Samvat 2077, increased demand for private vehicles will drive up the sales of automobiles. Change of trend towards a healthy lifestyle and maintaining good hygiene will support the FMCG sector. Also, many people are now realising the value of medical and life insurance and hence healthy returns over the period is expected in the insurance space too.
As a huge chunk of population and many companies are moving towards work from home culture, the IT sector is believed to still be in the limelight. Lastly, as many new companies have been registered during the pandemic and many old ones are reviving, Palviya said that they will need strong financial support and a good banking experience, hence, private banks are best placed in this regard.