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The market staged a spectacular performance in FY17, rising more than 17 percent against a loss of 9 percent in the previous financial year. The rally was largely driven by events that took place in the last quarter of the year which was marked by demonetisation drive and emphatic victory of BJP in Uttar Pradesh.
It was also backed by FIIs inflows and support from DIIs, which together pushed the Nifty to a record high of 9,218.40. However, before this rally, a slew of events (demonetisation, Brexit, Fed rate hike and US elections) caused heavy selling pressure in the market that fell closer to 7,900.
Experts turned bullish on the market, especially after UP elections which assured FIIs that the reforms agenda of the NDA government is likely to continue after 2019 also. They are not worried much about the Fed rate hike and valuations which are already stretched.
Experts are confident about earnings growth in FY18. They expect the market to hit a new high in the next financial year (FY18), though there will be intermittent correction as part of a bull run. They don't see a major correction in the market.
The Nifty looks poised to hit the 9,500-9600 mark in the next 4-6 weeks, says Mohammed Apabhai of Citigroup Global Markets, who is of the view that the market is nowhere close to 2008 bubble.
Vibhav Kapoor of IL&FS says he sees the broader index clocking 10,300 by March 2018, albeit with caveats on earnings growth and 10-year yields in the US.
In the months of April and May, largecaps could see a fall if earnings are not good, he feels.
Andrew Holland of Avendus Capital also says only fourth quarter earnings can cause selling pressure in the market. He feels the Goods and Services Tax (GST) is going to be a long-term positive for the market, although there may be some difficulties for the first three months after implementation.
Here are top five big events that rocked markets in FY17:
Brexit
Finally on June 23, Britain people voted for exiting European Union
Demonetisation
Prime Minister Narendra Modi, on November 8, made a surprise announcement of withdrawal of legal tender of Rs 1,000 and Rs 500 notes.
Donald Trump
Donald Trump, on November 8, has elected at 45th US President, which was a surprise for global experts.
Fed Rate Hike
Federal Reserve Chair Janet Yellen announced rate hike by 25 basis points in December policy meeting and forecasting two more rate hikes in 2017 and three in 2018.
State Elections
BJP has seen landslide victory in Uttar Pradesh and Uttarakhand elections, and also managed to form governments in Manipur & Goa. However, it lost in Punjab to Congress.
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