Sen­sex Likely To Touch 36,000 By Next Di­wali

Dalal Street Investment Journal - - EDITOR'S KEYBOARD - V B PADODE Ed­i­tor-in-chief

Be­fore I talk on the mar­kets and what lies in it for us in the com­ing year, I take this op­por­tu­nity to wish you all dear read­ers a Happy Di­wali and in­deed wish you all a Happy and Pros­per­ous Year ahead.

I can say with a lot of con­fi­dence that eq­uity in­vestors will be a lot more richer by Di­wali next year than this one as the Sen­sex in my view will de­liver 18 to 20 per cent re­turns over one year. In­dian econ­omy has slowed down, but it is sound and con­tin­ues to re­main the fastest grow­ing econ­omy in the world. The very bullish ex­pec­ta­tion on the econ­omy’s re­vival and the re­forms un­der­taken by the cur­rent gov­ern­ment is what is keep­ing the for­ward-look­ing eq­uity mar­kets ex­cited.

Any cor­rec­tion in the cur­rent mar­ket sce­nario is like get­ting an op­por­tu­nity to buy branded goods at at­trac­tive dis­counts. Let us not worry about cor­rec­tion and in­stead, in­vest our en­ergy and time on iden­ti­fy­ing the out­per­form­ers. Trust me, there are very many stocks avail­able in the mar­kets even at this junc­ture that can pro­vide ex­tra­or­di­nary re­turns over the years. Even if there is a cor­rec­tion in the mar­ket,

I ex­pect a V-shaped re­cov­ery.

The abun­dant liq­uid­ity with im­prov­ing global eco­nomic sit­u­a­tion is sim­ply too good to re­sist for long-term eq­uity in­vestors. The kind of par­tic­i­pa­tion we are see­ing from eq­uity in­vestors in IPOS speaks vol­umes about the un­der­ly­ing pos­i­tive sen­ti­ments among in­vestors in In­dia.

In our cover story this is­sue, we have shared our mar­ket out­look and also shared some in­ter­est­ing mar­ket sta­tis­tics. Al­most 188 stocks more than dou­bled in the last one year even as more than 300 stocks de­liv­ered re­turns in ex­cess of 25 per cent in one year. Such was the strength in the mar­kets. One had to sim­ply hold on to a dozen stocks from the large bas­ket of out­per­form­ing stocks to smile your way to the bank.

For those who have missed last year’s rally, do not be dis­ap­pointed as we have come up with another set of top 7 stocks that are our top Di­wali picks. Go ahead and cre­ate a new portfolio with­out any reser­va­tions as eq­uity yet again is ex­pected to out­per­form the other as­set classes.

In our spe­cial re­port, we have pro­vided our com­mod­ity mar­ket out­look as we be­lieve the syn­chro­nous eco­nomic growth glob­ally is ex­pected to push com­mod­ity prices higher.

There are mul­ti­ple fac­tors work­ing in favour of eq­uity mar­kets. One of the most im­por­tant fac­tor aid­ing the higher val­u­a­tions in eq­ui­ties is the lower in­ter­est rate en­vi­ron­ment glob­ally. In In­dia, ex­pect some steady earn­ings up­grade cou­ple of quar­ters down the line. In­dian mar­ket will con­tinue to en­joy a growth pre­mium and may con­sis­tently trade above its long-term av­er­ages. Rich val­u­a­tions should not be a ma­jor con­cern here for long-term in­vestors.

Sen­sex should, in my mind, touch at least 36,000 by next Di­wali, while the lower limit for Sen­sex could be 31,000, un­less some cat­a­strophic event breaks out.

In­vest reg­u­larly, in­vest in tranches and do not in­dulge in lever­age trad­ing. We will al­ways be there to sup­port you with guid­ance on the mar­kets and iden­ti­fy­ing growth-ori­ented in­vest­ing ideas for you.

Once again, I wish you a Happy and Pros­per­ous Di­wali!

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