After a disconnect earlier in the year, Indian markets have started aligning with global markets and are expected to move up, founder of Indiacharts, a financial services firm, Rohit Srivastava has said, adding he expects the Nifty to hit 20,000 by December end.
“The US and European markets started to recover from January but Indian markets were disconnected due to the Adani-Hindenburg fiasco. That is now behind us and markets are starting to move up,” Srivastava told Moneycontrol on June 2.
He was referring to a report by American short-seller Hindenburg Research in late January that accused the Adani group of stock manipulation and other irregularities. The Indian conglomerate denied the charges but the report triggered a rout in group companies’ shares, which have since stabilised.
The benchmark Nifty50 has recovered more than 9 percent from the March lows to 18,534 now. The Sensex has gained close to 8.5 percent during the period.
“In March, we also had the highest-ever short position build-up by foreign institutional investors. Most of those positions have been covered now. So my sense is that markets bottomed out in March,” Srivastava, who specialises in Elliott Wave analysis, said.
Elliott wave theory was published by Ralph Nelson Elliott in the 1930s. It is a technical analysis tool that predicts that stock price movements in waves rather than simple patterns.
Also Read: The greatest short squeeze of the decade is here. Rohit Srivastava tells us why
Nifty earnings per share (EPS) for the March quarter came in at Rs 233, 5-6 percent higher than the street’s estimates. It was up 14 percent sequentially and 13 percent year-on-year.
Banking & financial services, autos and metals space performed better than expected, while the rest of the sectors were broadly in line.
“Be it economic growth or earnings growth, we have done better than most parts of the world,” said Srivastava.
India’s Q4 GDP surprised on the upside at 6.1 percent against an estimate of 5 percent.
As India aligns with markets globally, the Nifty could hit 20,000 by December-end and the Nifty Bank scale the coveted 50,000 mark, he said.
“It was a one-and-a-half-year-long consolidation phase, which I would call a clean-up phase. From March onwards, we are seeing pretty strong breath. So this should be a continued bull run for the rest of 2023,” he said.
On June 2, Indian equity benchmarks closed in the green, with the Sensex up 118 points at 62,547 and the Nifty gaining 46 points to close at 18,534.
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