Stocks may see correction

New Delhi, Sept. 1: The Indian benchmark Sensex is the best performing index among major global markets so far this year and this as well as corporate earnings are expected to double over the next four years, a Bank of America Merrill Lynch report says. The markets may correct about 5 per cent over the next 2 months but in the long- term the outlook remains bullish, the global brokerage firm said, adding that buying in dips is a “compelling strategy”.

After five years of being negative on India’s earnings growth, the brokerage firm turned positive late last year. “Sensex is the best performing market among major global markets so far this year. Our bullishness on the Indian market is driven by our view that the earnings have turned the corner. We think market returns could mirror earnings growth,” it said. In the near term, the markets, however, may correct around 5 per cent as the pace of reforms is slower than what it initially built in, the report added.