Sensex May Rise 3000 Pts More By Year-end: ET Poll
The Sensex could rise by up to 3000 points from current levels by year-end as a new business-friendly NDA government implements reforms and removes hurdles to investment, a majority of participants in an ET poll said on Monday. Stocks have rallied strongly in the last two trading days ahead of the exit polls on Monday evening, led by foreign institutional purchases. These investors net bought shares worth almost ` 2,500 crore on Friday and Monday. “Markets are expected to extend their rally on optimism of a stable and strong government at the Centre,” said Navneet Munot, chief investment officer at SBI Mutual Fund. Exit polls on Monday showed the BJP-led NDA securing a comfortable majority in the just-concluded general elections. India TV-C Voter has esitmated NDA will get 289 seats, while television channel Aaj Tak has projected about 272 seats. India Today-Cicero is estimating 261-283 seats for the NDA, while CNN-IBN-Lokniti expects the alliance to win 281 seats. Times Now is estimating the NDA will get about 249 seats. By December 31, the Sensex could touch 25000, said 38% of the poll participants. While 25% of the participants expect the Sensex to advance to 26000, another 25% see the index crossing 26000 by the year-end. “We believe the current rally may continue till the final verdict and that the long-term bullish trend is firmly in place,” said Sunil Singhania, chief investment officer, Reliance Mutual Fund. “Exit polls predict people have voted for a stable government at Centre,” he said. A majority of those polled advise investors to buy stocks of banks, oil & gas, power, capital goods, and infrastructure. They recommend exiting defensive bets such as information technology and consumer staples.
In the poll, 63% of the participants felt investors could fully or partially book profits after the recent rally as stocks may fall if the results on Friday don’t match exit poll predictions. Exit polls have got it wrong in the past. In 2004, various exit polls had predicted a BJP victory, while in 2009 they forecast a hung Parliament. On both occasions, the Congress-led UPA formed the government. A majority of the poll participants said the markets could fall 10-15% if a BJP-led National Democratic Alliance (NDA) does not form the government. “If there is a fractured mandate, markets may see a sell-off,” said Munot. Markets participants expect retail investors, who are waiting for the election outcome, to start buying if the results are favourable. “If the election outcome results in the formation of a strong government with a majority, we may find fence-sitters with less appetite for risks getting into the market. This could push the Nifty to 7200,” said Kunj Bansal, ED & CIO,