Sen­sex set to touch 28,000 and ru­pee will sta­bilise at 57-58 to the dol­lar by year-end

The Economic Times - - Front Page - OUR BUREAU

In­dia is at the be­gin­ning of a strong bull mar­ket over the next few years fol­low­ing a strong man­date for a Naren­dra Modi-led govern­ment, top bro­kers and fund man­agers told ET. Many bro­ker­ages re­vised their Sen­sex and Nifty tar­gets within hours of the elec­tion re­sults on Fri­day. The Sen­sex is set to touch 28,000 and the ru­pee will sta­bilise at 57-58 to the dol­lar by the end of the year, ac­cord­ing to a sur­vey of 26 fund man­agers and bro­kers by ET. Some see the Sen­sex surg­ing by about 10,000 points more in two years. In­dia voted for de­vel­op­ment and re­forms, and the new govern­ment will push through pol­icy changes to re­vive growth, which in turn will trig­ger a strong bull rally in In­dian eq­ui­ties, said ex­perts. “The de­ci­sive man­date by the people of In­dia will pave the way for a con­ducive pol­icy en­vi­ron­ment, leading to the res­ur­rec­tion of growth in the econ­omy over the next few years,” said San­deep Nayak, chief ex­ec­u­tive of­fi­cer, Cen­trum Broking. “FII and FDI in­vest­ments should ac­cel­er­ate, set­ting the stage for a ro­bust bull run for the next cou­ple of years.”

About 50% of the sur­vey’s par­tic­i­pants ex­pect the Sen­sex to touch 28,000 by De­cem­ber while 15% feel the bench­mark will hit 30,000.

“Erring on the side of cau­tion, even if we as­sume the Sen­sex gen­er­ates 25% per an­num over each of the next two years, we are look­ing at Sen­sex at 30,000 a year from now and at 37,500 two years hence,” said Sau­rabh Mukher­jea, CEO, in­sti­tu­tional eq­ui­ties, Am­bit Cap­i­tal.

About 27% of the poll’s par­tic­i­pants ex­pect the ru­pee to strengthen to 57-58 against the dol­lar whereas 18% ex­pect it at 56-57.

“The in­com­ing govern­ment may pre­fer a stronger ru­pee and RBI too may de­cide to stop the forex mar­ket in­ter­ven­tion now that po­lit­i­cal risks have sub­sided,” said Nilesh Jasani, an­a­lyst at Jef­feries In­dia.

Most ex­perts ad­vised buy­ing stocks of qual­ity in­fra­struc­ture com­pa­nies, but some pre­ferred PSU banks

While 58% ad­vised buy­ing qual­ity in­fra­struc­ture stocks, 50% pre­ferred state-owned banks. En­ergy, cap­i­tal goods and metals are the other sec­tors strongly rec­om­mended by the poll par­tic­i­pants, who ad­vised an exit from FMCG, IT, phar­ma­ceu­ti­cal and realty. “De­fen­sive sec­tors such as pharma, IT and FMCG may take a back seat while the bal­ance would shift to­wards sec­tors linked to do­mes­tic in­vest­ment and in­fra­struc­ture,” said Anup Bagchi, man­ag­ing di­rec­tor and CEO, ICICI Se­cu­ri­ties. “In­vestors should con­tinue with a stag­gered buy­ing ap­proach, and any near-term cor­rec­tion may be used as a buy­ing op­por­tu­nity in high-beta, cap­i­tal-in­ten­sive com­pa­nies with a ro­bust bal­ance sheet.” The top picks of a ma­jor­ity of the bro­kers and fund man­agers in­clude Axis Bank, ICICI Bank, L&T, LIC Hous­ing, M&M, Maruti, ONGC, RIL, SBI and Tata Mo­tors. Many of the par­tic­i­pants said that con­sumer price in­fla­tion, a big worry for the cen­tral bank, would be at 7.5-8% in FY15. An­nual con­sumer price in­fla­tion ac­cel­er­ated to a three-month high of 8.59% in April, driven by higher food prices, govern­ment data showed on Mon­day. As for growth, 47% of those polled ex­pect In­dia to ex­pand 5.5-6% in the cur­rent fis­cal, in line with ex­pec­ta­tions de­spite the change of guard at the Cen­tre as the chal­lenges to the econ­omy re­main, an­a­lysts said. They said re­vival will be grad­ual rather than sharp. “The re­vival in econ­omy will be in­vest­ment-led, but grad­ual. The pick-up in growth will be a func­tion of pace of pol­icy de­bot­tle­neck­ing, in­vest­ment ap­petite of the cor­po­rate sec­tor and ex­tent of the govern­ment’s own role in cap­i­tal for­ma­tion,” said Ro­hini Malkani, chief econ­o­mist, Cit­i­group In­dia, in a note to clients.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.