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Experts are of the view that the government will take more measures to boost investor confidence.
It was another big day for Indian markets, with both the Sensex and the Nifty touched new highs on November 26, thanks to strong global cues.
The Sensex hit a record high of 41,120.28, while the Nifty50 climbed to 12,132.45 before witnessing profit-taking towards the close of the session.
Experts say the Nifty rally could extend towards 12,300-12,400 in the near-term. The euphoria is likely to continue in the short-term on the back of strong global cues, buying by foreign investors, reforms by the government, expectations of a revival in earnings growth and consistent money coming into markets via mutual funds.
In hitting fresh highs, Indian markets are following other developed markets and emerging markets like Brazil, Dhiraj Relli, MD & CEO, HDFC Securities told Moneycontrol.
“We at HDFC Securities had forecasted a Nifty target of 12,400 in December 2018 and now we are almost there. FIIs have largely been bullish on the Indian market in November, investing around Rs 18,200 crore till 25th,” Relli said.
“Most of the drivers of the current slowdown appear to be temporary and related to channel financing/GST credit issues. Companies that are able to gain market share from their competitors have been less impacted by the slowdown.”
Relli expects earnings to recover faster with FY20 and FY21 earnings growth being driven by lower corporate tax rates and lower loan-loss provisions. “We remain positive on BFSI, consumer stocks, PSU and Digital/internet stocks. Greater visibility of resumption of corporate earnings growth is necessary for the Nifty to move beyond 12,400,” Relli said.
The government has taken several measures to revive growth and more are expected, and dips, if any, should be used to accumulate quality stocks.
“The Nifty finally managed to touch new high today on the back of strong global cues, FII buying and improvement in market sentiments post a slew of government reforms,” Siddhartha Khemka, Head – Retail research, Motilal Oswal Financial Services Private Ltd, told Moneycontrol.
“While Nifty50 valuation at 22x FY20 is not cheap, we believe that the current momentum can sustain in the near term on the back of liquidity flows and positive sentiments.”
A list of 15 large-cap stocks which brokerage firms say are a buy post-September quarter results:
Prabhudas Lilladher is positive on HDFC Bank, ICICI Bank, Infosys, Maruti Suzuki India, L&T, UltraTech Cements, Britannia Industries, Siemens, UPL, and Petronet LNG.
