The Asian Age

Stocks may see cor­rec­tion

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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.

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