Use dips to buy! Nifty50 could test 15,500 in February series, says Nirali Shah of Samco Securities

We have a bullish outlook on the market but mean-reverting moves cannot be ruled out. For the February series, we believe Nifty may test 15,500, Nirali Shah, Head of Equity Research, Samco Securities said in an interview with Moneycontrol’s Kshitij Anand.

edited excerpts:

A) The markets achieved a historic feat by attaining the highest-ever jump on Budget Day in a decade. Both, the Nifty50 and Sensex rallies were primarily fuelled by the Budget which brought with it immense optimism and positive economic reforms that aimed at economic growth through infrastructure development, capex incentives, privatisation, and asset monetisation.

Growth was the key focus even if it meant letting go of the fiscal target. This cheered the majority as there was nothing negative that would puncture the mood of the investors.

Overall, a market-friendly Budget got investors out of their blues and created confidence in India’s growth story which led to a rally in benchmark indices.

A) The decision by the RBI to allow retail investors to directly participate in G-Secs is something no Asian country has allowed till now. It is indeed a welcome move as it puts the RBI in direct competition with other banks to attract retail savings deposits.

The opening up of G-Secs for investing certainly expands the investment universe for investors who can now diversify further and be empowered to better manage risks by gaining exposure to sovereign bonds directly, which were for a long time only available to institutions for investing.

As far as its popularity is concerned, only time will tell how quickly retail investors understand the functioning of the bond market and invest.

A) The budget has been pro-economy and has made the markets ecstatic. This was reflected by the indices which rose to record high levels without much friction, driven by broad-based optimism.

While the market momentum continues to be strong, certain pockets have more than factored in the growth and therefore we might see some cooling off and short-term profit booking in some sectors in the short-term.

All eyes will now be on the corporate results which should keep the indices buoyant going forward. Investors should ideally hunt for such dips created by profit booking for long-term investing.

A) The market is likely to remain bullish as there is no significant negative news event in the near term. On the downside, 14600 is established as immediate support and any break of the same will lead to short-term weakness in the market.

We have a bullish outlook on the market but mean-reverting moves cannot be ruled out. For the February series, we believe Nifty may test 15,500.

A) Autos posted better-than-expected numbers for Q3 as they saw a strong recovery in demand over the last quarter, which was indicated by a drastic improvement in sale volume numbers.

Another factor expected to play out is the stabilising of input costs such as steel which is now topping off as global steel prices start cooling down.

This also augurs well for auto companies over the longer term. Banks also reported a robust Q3 as banking activities and collections normalised.

With the broader economic recovery at play, these sectors could continue their upmove in the long term post a mild breather.

A) With a highly lauded budget aimed at boosting economic growth, the infra sector looks like a good place for investors to shift their focus onto.

As the government makes capex spending a priority, infra companies will stand to see more order tendering and can see strong revenue growth in the coming times.

Another sector in focus will be insurance which is expected to benefit from the increase in FDI limits and an open architecture approach.