Moneycontrol Bureau
Brokerage house Ambit Capital is recommending its clients to sell into this rally as it feels fundamental concerns will weigh the market down in the short term.
“With GDP growth unlikely to revive meaningfully in FY16 and with consensus likely to cut its earnings growth estimates for FY16, Indian equities are headed for a difficult two to three months in our view,” the Ambit note to clients said.
Ambit estimates this year's gDP growth at 7 percent and Sensex compnaies' earning growth at 9 percent.
According to Ambit analysts Gaurav Mehta and Prashant Mittal, the Nifty’s intermediate trend is down as it continues to trade below the key trendline that had defined the upmove on the index since the May 2014 elections.
“Tactically, we believe we are in a relief rally at the moment which, even in the best case, should find it difficult to stretch beyond 8600 on the Nifty,” the note said.
Ambit is bearish on individual sectors, financials, oil & gas and consumer staples. It is bullish on auto and auto components, agri inputs, consumer discretionary and pharma.
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