The bulls were in charge on Dalal Street and market made a strong pullback after a 4 percent correction on the last day of the trading week.
CNBC-TV18 in their special show Taking Stock asked experts on how they expected the market to trade in the coming week and their outlook for 2019.
Manishi Raychaudhuri of BNP Paribas said the correction witnessed by our market was in line with correction seen across global markets. Investors in India are now keenly looking forward to Gujarat elections and Q3 earnings, he said.
Vibhav Kapoor of IL&FS said the corrections seen in the market of and on have been shallow. He too is of the view that the market is looking forward to Gujarat election results.
However, overall the fundamentals and technical of the market like huge liquidity, low interest rate, moderate growth, expectations of improvement in earnings growth are keeping the markets up, said Kapoor. There was huge amount of inflows into domestic Mutual Funds worked up the market sentiment and as long as they continue it is unlikely to see big correction for the market, he said.
When asked if thought the earnings would catch up 2018, Kapoor said they would be better than 2017, growth rate will improve but it is not likely to meet analysts' expectations. So one will see some downgrades happening.
Earnings growth for FY19 could be around 15-16 percent and if that happens along with the robust liquidity situation and the rally in global equities continues, the market will have a decent year in 2018 as well, said Kapoor.
However, one will also have to watch out for political incidences like state elections etc in 2019, said Kapoor.
| Index | Prices | Change | Change% |
|---|---|---|---|
| Sensex | 80,710.76 | -7.25 | -0.01% |
| Nifty 50 | 24,741.00 | 6.70 | +0.03% |
| Nifty Bank | 54,114.55 | 39.10 | +0.07% |
| Biggest Gainer | Prices | Change | Change% |
|---|---|---|---|
| Eicher Motors | 6,580.50 | 155.50 | +2.42% |
| Biggest Loser | Prices | Change | Change% |
|---|---|---|---|
| ITC | 407.35 | -8.55 | -2.06% |
| Best Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty Auto | 26320.60 | 325.75 | +1.25% |
| Worst Sector | Prices | Change | Change% |
|---|---|---|---|
| Nifty IT | 34635.80 | -507.30 | -1.44% |
Stock specific, overall, the house is focused on private sector banks (focused on retail), select industrial companies, oil refineries, chemical manufactures. However, Indian IT are least favourite of theirs, said Raychaudhuri.
Kapoor said in this sort of bull market, there is lot of momentum buying or growth buying and people tend to buy stocks which have got into new highs. So, value stocks don't perform that well, he added.
When asked if this kind of market sentiment would prevail, Kapoor said if US market continues to rally then global markets also do well. However, a fast or protracted increase in US interest rates could have an adverse impact on liquidity for emerging markets at some point of time.
When asked if they were still a value buy even post the big run in the gas space, Raychaudhuri said the infrastructure development for gas distribution companies looks good. He said, the house was not so bullish on the oil and gas explorers but was positive oil marketing companies and oil refineries.
In the same interview, Ashwani Gujral gave technical ideas for next week and answered some stock specific queries.
For full discussion, watch video
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