‘Sen­sex to Touch 30K’

The Economic Times - - News Of The Day -

It’s the first time in 30 years that one party has got a ma­jor­ity on its own.

In­vestors, relishing the prospect of a strong govern­ment, sent the Nifty to over 7,200. The BJP has the num­bers to form the govern­ment on its own but the party is ex­pected to rope in its pre-poll al­lies in a coali­tion govern­ment.

“I have no doubts in my mind that we have started the big­gest bull mar­ket that at least I think I will see in my life­time,” bro­ker and Big Bull, Rakesh Jhun­jhun­wala, told ET NOW. “The in­dex will surely dou­ble and tre­ble. If it dou­bles in five years from now, it will be a very poor gain ac­tu­ally. I see it hap­pen­ing much faster. In­dex will dou­ble in the next three (years)… I mean, from 6,300. I will be dis­ap­pointed if in three years we have a Nifty be­low 12,500.”

The Sen­sex rose 4.9% over the week to a record of 24,121.74 on Fri­day, while the Nifty jumped 5.2% to 7,203. The in­dices have been among the best per­form­ers in emerg­ing mar­kets, ris­ing 13.94% and 14.26%, re­spec­tively, since the be­gin­ning of the year. “Change is in­deed sweep­ing the coun­try,” said Motilal Oswal, chair­man of Motilal Oswal Fi­nan­cial Ser­vices. “In my view this is the best time to in­vest in eq­ui­ties for the medium to long term. A port­fo­lio mix of growth and cycli­cal stocks would yield far big­ger re­turns than debt or for that mat­ter any other as­set class.”

In­dian stocks have out­per­formed most emerg­ing mar­ket in­dices so far this year on hopes that elec­tions and a new govern­ment headed by Modi will end pol­icy un­cer­tainty and re­vive in­vest­ment. Sev­eral pro­mot­ers, some of them per­ceived as be­ing close to the man who will be Prime Min­is­ter, have seen their wealth surge with stocks on a tear. Gau­tam Adani’s wealth has risen Rs 12,512 crore in the past week, while that of Re­liance In­dus­tries Ltd’s Mukesh Am­bani is up Rs 12,207 crore and that of Vedanta’s Anil Agar­wal has ad­vanced Rs 9,123 crore. But Fri­day’s re­sults ex­ceeded ex­pec­ta­tions and most exit poll projections. Given the mar­gin, the chances of a de­ci­sive, re­form-ori­ented govern­ment has in­creased man­i­fold, in­vestors be­lieve. “The cur­rent bull mar­ket to con­tinue with some cor­rec­tion in next few days,” said Nir­mal Jain, chair­man of In­dia In­fo­line. “Sen­sex to touch 30,000 by year end. Though some of the sec­tors are ex­pen­sive, many of them in­clud­ing cycli­cals, bank­ing, in­dus­trial and con­sumer dis­cre­tions are way off from their peak and these are the sec­tors to rally go­ing for­ward.” Some of the big­gest gain­ers on Fri­day in­clude JP Power, up 8.19% to Rs 18.22, Axis Bank, up 7.9% to Rs 1,795. All sec­tors, ex­cept three ended in the green with the BSE Bankex ris­ing 4.39% and the BSE Realty in­dex gain­ing 5.97%. The con­sumer goods in­dex fell 1.85% and the IT in­dex slipped 2.22% while the health­care in­dex fell 1.39%. Sesa Ster­lite was the big­gest gainer in the Nifty, ris­ing 11.05% on hopes that the new govern­ment will push for the lift­ing of the ban on iron ore min­ing in force in many parts of the coun­try. Pun­jab Na­tional Bank rose 8.16% to Rs 924.95 on hopes that a Modi-led govern­ment will find a way to re­solve the bad as­sets on bank bal­ance sheets. Bharat Petroleum rose 6.85%, while DLF rose 6.50% to Rs 170.35. State Bank gained 5.95% to Rs 2,414, while ICICI Bank gained 5.38% to Rs 1,470.15. In­dia has been ruled by a se­ries of coali­tion gov­ern­ments since 1989, with the sin­gle largest party de­pen­dent on al­lies for a ma­jor­ity and thereby be­ing held hostage to them. That era has come to an end with the BJP win.

“It is in­ter­est­ing that we have such a clear man­date af­ter 30 years,” said Rasesh Shah, chair­man and CEO, Edel­weiss Group. “This is good news for eco­nomic growth. We needed a clear ver­dict to get the econ­omy back on track.” Rat­ing agency S&P said on Fri­day that it ex­pects the new govern­ment’s re­form ini­tia­tives in eco­nomic and fis­cal poli­cies in the next two to three months may have sig­nif­i­cant im­pli­ca­tions on the sov­er­eign credit rat­ing on In­dia’s rat­ing. “In our view, NDA’s strong show­ing in­di­cates that it will have a rea­son­ably good po­lit­i­cal plat­form to tackle struc­tural is­sues,” it said.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.