Capital markets to scale new highs in next six months: Experts
|Source: The Hitavada Date: 11 Sep 2017 09:46:39|
AFTER hitting new highs the barometer of business — Sensex seems to be passing through a consolidation phase and would be range bound for the next two quarters feel some experts.
“The capital markets will stay consolidated for the next two quarters due to the affects of demonetisation and implementation of Goods and Services Tax (GST). But this will be a temporary phase,” said CA Dr T S Rawal while talking to The Hitavada on Sunday.
All eyes are waiting for smooth implementation of GST. There are various glitches in the functioning of GST portal like return filing which need to be sorted out at the earliest. For the time being the markets would be looking for positive triggers. Till then, the markets would remain subdued for the next two quarters. Once things are normalise, markets would breakout and climb to new highs. At higher levels, there would be heavy selling pressure but given the kind of liquidity coming from international portfolio investors, domestic mutual funds and high net individuals which are flush with funds, the markets would be able to easily sustain from falling too much, he added.
CA Kailash Jogani is of the view that the Indian economy is in very good shape given the fact that the Nifty after conquering 10,000 point level has been able to sustain near that level. With falling interest rates investors have directed their focus towards the capital markets. Also, Government is collecting good revenue through taxation. There are number of factors which have been favourable for the economy like implementation of GST, range bound international oil prices, bottoming out of GDP, prospects of agriculture growth as a result of good Monsoon, inflation under control and huge liquidity being pumped in the markets by FIIs and domestic MFs. All these factors are cheering investor sentiment, he said.
Jogani said that investors should lap up stocks of fundamentally sound companies that have promoters with good track record. He feels that sectors like infrastructure, metals and banking would give high returns to investors with a long term vision for the next two to three years.
He anticipates that the Nifty would be at 10,500 point level by December.
Anuj Badjate, Chairman of Badjate Stock and Shares Pvt Ltd is of the view that the share markets were under a consolidation phase. Looking at the technical charts, the markets are range bound and break would be evident after a few months. “The positive affects of GST are yet to be seen,” he pointed out. He expects good corporate results in the next two quarters to swing the markets to a higher trajectory. He expects the consolidation of the markets to be temporary in nature. This is a good time for investors to buy in sectors like base metals where prices are looking up world-wide, NBFCs, PSBs, infrastructure and cement to see 6 per cent to 8 per cent volume growth.
CA Sameer Bakre said that the Indian economy was passing through a transitional phase where there was a conflict between legacy issues of the past like NPAs in banking, policy paralysis etc., and new reforms being implemented by the present Government. The Government is investing heavily in infrastructure development with a focus on rural economy.
He is optimistic regarding growth of the economy as Government had floated tenders worth crores of rupees in building highways, metro rail, railways, bridges, ports, shipping etc. Investors should buy stocks of selected companies which are working in these areas. Bakde was confident that the share markets would breach new highs within the next six months as things get sorted out on various fronts like NPA issue in banking and smooth implementation of GST.
CA Julfesh Shah, Member of CSR and PR Committee of ICAI, New Delhi said that the share markets would witness new highs after six months as the positive affects from implementation of GST start to trickle into the economy. Already, manufacturing sector was happy in the GST era. About six to eight taxes have been subsumed under GST and prices of various products have decreased by 25 per cent and in some cases by 40 per cent. “Economic growth will be slow for the time being. After a few months, the positive affects of GST will start to kick into economy,” he said. “This is the right time for investors to pick up stocks of companies with sound fundamentals,” he said.