‘Sensex may Touch 27K by Year End’
The Nifty has gained 9% in the past 10 days and 15% since the beginning of the year. China, India’s biggest emerging market rival, has fallen 4.30% year-to-date, while Canada has risen 7.10%, UK, 0.87% and the US is up 1.94%. “The markets have enough steam to run up to the 27000 levels by year-end,” said Kaku Nakhate, MD and country head of Bank of America-Merrill Lynch. “There are a huge number of FIIs waiting in the wings — those who missed out on the rally — to come in at every correction. Not just FIIs but I also expect domestic institutions and retail investors to increase participation,” Nakhate said. What is important to note here is that Indian markets have contributed close to 50% in the recent $572 billion increase in global market capitalisation. India’s contribution of $282 billion is equivalent to total GDP of Philippines. India now comprises 2.2% of the world market capitalisation compared with 1.8% at the beginning of the year. According to Bloomberg, since the beginning of the year, foreign funds have pumped in $7.6 billion dollars in Indian equities, which is highest among all emerging markets. “Market capitalisation is linked to GDP of a country. As GDP grows, market capitalisation grows,” Rasesh Shah, Chairman of Edelweiss Group said. “As regards Indian markets, its market capitalisation is close to 75% of its GDP. In comparison with this, in developed markets, the market capitalisation to GDP ratio is over 100%. This means Indian markets have a lot of room to catch up,” said Shah.
Indian markets have contributed close to 50% in the recent $572 billion increase in global market capitalisation