It was a momentous day for the Indian equity market with the benchmark indices hitting highs - the Sensex hit 30,000 and closed a tad below that to hit another closing high. The Nifty too ended above 9,250.
We are in a classic bull market and it is a blue sky scenario with no major threats seen, Dipan Mehta, Member BSE & NSE. The biggest factor driving the market is liquidity – both foreign money is pouring in and domestic savings are increasing their exposure to equity.
“Bull Markets know no highs, so we will continue to see stock prices and index levels to move to levels that will keep on surprising us,” says Mehta.
Ajay Srivastava, Dimensions Consulting says Sensex scaling 30,000 is a landmark level because it has come back on a broad base. The only distinguishing factor is the kind of invest pattern witnessed between the two 30,000 rallies. The earlier one was more speculative driven, more forward positions but the current one is based on more long-term investors, retail putting in money, as well as the domestic imputations, mutual funds.
“So the complexion of the rally is very different and therefore has got little more sustenance,” believes Srivastava.
The most spectacular thing about this rally is the way the savings pattern has changed in this country – that is the inflection point. Even four years back, financial assets were a small portion of our savings but today they have become a large portion. The fact that Sensex has gone 30 times in 30 years -from 1000 in 1986 to 30000 in 2017, is not so spectacular.
Market Expert, Sudip Bandopadhyay believes even at 30,000 Sensex, it continues to remain a stock pickers market. Although valuations in some stocks look stretched there are enough opportunities still available.
From the pharma space, Bandopadhyay thinks Lupin is a great buy at current levels. Some others could be Allcargo Logistics, VRL Logistics, which are still available at reasonable valuations.
According to Bandopadhyay, Reliance Industries has a lot of way to go. Jio has changed the game for Reliance, he adds.
Mehta says, we are seeing sector rotation with new stocks coming into play, adding that laggard sectors too have come into the reckoning. The only concerns remain around earnings growth but there is hope that they will improve.
Most importantly, the perception of risk has gone down significantly, says Mehta. According to him, managing a portfolio is getting very challenging because finding good quality stocks is becoming challenging. However, Sensex scaling new highs is definitely a trigger signal for those investors still waiting, to get into equities. It is time for them to look at equities.
Stock specific buying opportunities will come out in the earnings season and so investors should wait for that instead of waiting for a broad market correction, advises Mehta.
In the same interview, SP Tulsian of sptulsian.com, Prakash Gaba of prakashgaba.com, Mitessh Thakkar of miteshthacker.com, and Jai Bala of Cashthechaos.com shared their stock specific views.
For full discussion, watch video
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