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Last Updated : Jan 25, 2018 11:09 AM IST | Source: CNBC-TV18

Gautam Shah feels market still far from major top, could gain 10-12% in 2018

JM Financial’s Shah believes that the Street is far away from major market top. This rally will continue on a gradual basis.

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Terming the bull run a ‘unique one’, Gautam Shah of JM Financial said the Street’s rally has no parallels and will continue to surprise investors.

Domestic liquidity, extent of correction, lesser volatility and political stability, among others, are seen as some of the reasons for the bull run.

Sounding optimistic on the market, Shah told CNBC-TV18, “We are far away from major market top. This rally will continue on a gradual basis. There could be a rational correction across sectors and that will be a new norm.”

While investors may show lukewarm response to fresh highs, in the mid-term, he remains positive on the market. Shah sees 10-12 percent upside for the Street in 2018.

So, what could be the risk figures for this market? Shah sees 10,800 as a base here and all declines should be bought into.

Among broader markets, he believes the midcap rally is here to stay despite the consolidation that it is going through currently. It is a case of midcaps taking a breather while largecaps rally right now. He is now waiting for the Budget and only around that event will midcaps make a comeback.

In terms of sectors, Shah highlighted that some underperforming banks have come to the party now and those will take the markets higher. “We are readying for a sustainable rally in PSU banks now,” he told the channel.

Meanwhile, he sees a huge potential among capital goods. The index could be a potential leader in 2018 and there could be a 400-point run on the capital goods index. “We are recommending clients to go big on that,” he added.
First Published on Jan 25, 2018 11:09 am
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