India’s benchmark equity index BSE Sensex will reach 31,000 points by the end of the current financial year in March 2018 on the back of recovery across the developed and the emerging markets, Pramod Gubbi, Head of Equities at Ambit Capital said on Monday. Speaking to CNBC-TV18 in an interview, Gubbi said that he sees a recovery in global markets across the developed and emerging markets, including India.
However, the expensive valuations can play spoilsport for some time, Gubbi said as he felt that the Indian market prices and valuations are front-ended, due to which the market could move sideways, undergoing consolidation before it scales up to 31,000 next. The market could give around 5% return or thereabout, he added.
Speaking further, Gubbi said that he has looked closely at the Pharmaceutical and Information Technology sectors and is of the view that both these sectors are relatively ignored for a lot of reasons, some genuine, some not.
Gubbi said that while on one hand, Pharma companies seem to have some clarity on earnings, the IT sector, on the other hand, is not clear as far as growth is concerned. Although, he added that the Pharma sector investments may not be as low-priced as those in IT.
Gubbi said that between the two, he is more confident about Pharma sector as of now, as it looks that by and large Pharma is over the FDA (United States Food and Drug Administration) issues.
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On a similar note, Timothy Moe of Goldman Sachs says he expects the Nifty to reach 9,500 in 12 months and 10,200 by 2018-end as earnings recovery gathers pace driven by 12% and 15% profit growth this year and next.
Hugh Young of Aberdeen Asset Management also says emerging markets are the best place to invest in the long-term but there are two major hurdles that the market could face – US Federal Reserve hikes interest rates and the ensuing reversal of flows (back to developed markets)