Capital markets poised to conquer new peak: Experts

Source: The Hitavada      Date: 27 Dec 2017 10:26:54


Business Bureau,

THE barometer of the economy -- the Sensex has skyrocketed to close at an all-time high of 34,010.61 points backed by renewed investor confidence on Tuesday. Similarly, the Nifty also shot up to close at 10,531.50 points.

“It seems that the Indian capital markets are booming as the negative effects of demonetisation and the Goods and Services Tax (GST) were fading away with the passage of time. Also, the Government is taking efforts to clear all the hurdles in the smooth implementation of the GST. In the near future, the positive benefits of the GST will be visible,” said CA Kailash Jogani, Immediate Past President of the Nagpur Chamber of Commerce Limited (NCCL), while talking to The Hitavada on Tuesday.

Jogani said that the present bull run could see the share markets scale new highs as large doses of liquidity were being pumped in by the FIIs, DIIs, HNIs and MFs. All global rating agencies were having an optimistic view of the Indian economy.

There was some amount of uncertainty during the Gujarat elections. But, after the ruling party won the elections, the foreign institutional investors (FIIs) and DIIs were assured of a stable Government, which cheered investor confidence. The share markets were poised to move northward as the pre-Budget rally had started, he said.

Recently, in the US the Federal Reserve lowered the corporate tax which pushed the Dow and Nasdaq indices to scale new peaks. Furthermore, the domestic trade and industry are expecting a cut in the personal Income-Tax and Corporate Tax in the coming Union Budget. Everyone thinks that the Union Budget will be a balanced Budget favourable for the rural India as well as the trade and industry.

Jogani said that there were some uncertainties and factors which could pull the markets down like the rise in international crude oil prices, higher inflation, tensions between US and North Korea, etc. He predicted the Nifty to oscillate between 10,500 and 11,000 point mark. “If the Budget is not favourable for the trade and industry, there could be a correction of 5 per cent to 10 per cent,” he added.

Anuj Badjate, Director of Badjate Stock and Shares Pvt Ltd, said that the bull-run could take the indices to dizzy heights like the Nifty between 11,200 and 11,500 points if there was a growth of 7 per cent in GDP. Also, the corporate profitability had to rise and the capex cycle needed to revive. He advised the investors to pick companies in infrastructure, cement, metal and telecom.
CA Sameer Bakre said that everyone was anticipating an industry-friendly Union Budget backed by bold reforms
which could push the Sensex to 38,000 points.

CA Dr T S Rawal said that the markets were running up too fast. Investors should be cautious while entering the markets. He advised the investors to look at opportunities and companies in infrastructure and FMCG sectors. The dream run could last for some time but after the Budget, there could be an event which might pull the markets down by 10 to 15 per cent, he cautioned.

CA Julfesh Shah, Member of PR and CSR Committee, ICAI, New Delhi said that he expected the share markets to touch fresh record highs in the next calendar year. He mentioned that the investors should be cautious while making fresh investments in the secondary market. Only after proper study and in-depth research, the investors should enter the share markets. Investors should not rely on tips, SMSes, emails or WhatsApp messages while investing.

“If in the upcoming Budget some booster package is announced for the industry and tax sops extended, then the Sensex will go higher in the range of 34,500 to 36,500 and may even touch the 37,000 mark,” he added.