Going by initial estimates from experts, the year 2020 could turn out to be a year in which benchmark indices could deliver another double-digit returns.
Year 2019 was fourth year in a row when Indian market gave positive returns with Nifty, Sensex both gaining in double digits. The S&P BSE Sensex rallied over 14 percent while Nifty gained 12 percent in 2019.
The market experts are suggesting that the momentum is likely to continue in 2020 as well.
The most aggressive target price of 14,400 for the Nifty50 is put out by Shrikant Chouhan of Kotak Securities, which translates into a rise of 18 percent from December 31 closing level of 12,168.
“Technically, Nifty has reached to the extreme target of nearly 12,300. We feel Nifty might correct to even 12,000-11,900, however, it would be an opportunity to buy index stocks with a positional view,” he said.
Chouhan further added that based on the monthly and quarterly charts, Nifty is preparing to hit the level of minimum 13,000 and a maximum of 14,400 in the next 12 to 18 months.
“Technically, the market has made strong base-building formation at 10,000 levels and now is preparing to hit the level of 14400, based on Gann angles,” he explains.
Factors that could play an important role in charting the direction of the market are Union Budget 2020, a continuation of the reform process to boost growth, global growth, revival in corporate earnings, and ease in trade tension between the US & China.
“We can expect a rally of 12-15% from current levels in the next calendar year as markets have already digested the lower GDP growth numbers,” Gaurav Garg, Head of Research, CapitalVia Global Research Limited- Investment Advisor told Moneycontrol.
“A recent report suggested that banks’ NPA can improve to 3.2% by March-end, and easing tension on US-China trade war may help the index to hit 14,000,” he said.
The government is taking a lot of measures to boost the economy by infusing liquidity in the market by using tools like repo rate cuts, corporate tax cuts, etc., but more are expected such as a cut in personal tax rate in the upcoming Budget.
“We are expecting a lot of measures such as a reduction in long-term capital gains tax as well positive changes in personal tax so all these positive aspects are in favor of bulls,” Ritesh Asher – Chief Strategy Officer (CSO) at KIFS Trade Capital.
“Technically, the positive momentum has already started. We are expecting the index to reach 13,200 levels in the coming year,” he said.
Indian market closed the calendar year on a strong note and near-record high, but the broader market remained under pressure despite some recovery in the last couple of months.
The coming year is going to be an eventful one and a number of domestic as well as global factors are likely to dictate the trend for the Indian market.
On the domestic front, the Union Budget, inflation and interest rate trajectory, once starts yielding desired results that would bring optimism amongst investors. Further, improvement in corporate earnings would bring back investor interest to invest, they say.
On the global front, positive developments on the US-China trade deal and US Fed interest rate trajectory would further boost investor’s sentiments.
“We believe the Indian market would continue its uptrend led by recovery in global economic growth on the back of easing tensions between US and China and dovish Fed,” Ajit Mishra, VP Research, Religare Broking told Moneycontrol.
“We expect the prevailing uptrend to continue in the next calendar also. Technically, Sensex has the potential to reach 43000+ zone and Nifty could settle around the levels of 13,000+ by the year-end,” he said.Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Subscribe to Moneycontrol Pro's Annual plan for Rs 399/- for the first year. Use coupon PRO2020 (Available on Web & Android only).