Nifty To Hit 9,000-9,200 Before March Despite Volatility: Deven Choksey
Nifty is showing remarkable strength due to renewed interest from FIIs, says Choksey.
The Nifty 50 Index will reach 9,000 to 9,200 levels before March despite the uncertainty over the outcome of crucial state election results, according to Deven Choksey.
Speaking to BloombergQuint, the managing director of KRChoksey Investment Managers said that the renewed interest from foreign institutional investors (FIIs) will be a key driver for the markets. Choksey added that India Inc. has delivered "satisfactory results” in the October to December quarter and most corporate balance sheets seem to be recovering.
The Nifty 50 Index reclaimed the 8,800 mark in early Monday trading, crossing the milestone for the first time since October 5, 2016. The index is on a four-session winning streak, and has gained in seven of the last 10 sessions.
Edited excerpts.
Can we expect more strength or is some consolidation/correction in order?
Nifty is showing remarkable strength because we have seen renewed interest from FIIs in the market, along with domestic investors.
A reason why FII buying is strong in India is because the participatory-note transactions are up for reversal before March and since these transactions are likely to get reversed on the derivatives side, FIIs may want to technically bring positions back to cash markets. That is a reason why we are seeing buying interest in some of the counters currently.
My own take is that Nifty is heading to 9,000 to 9,200 levels before March. There will be some corrections in between but the technical situation in the market could push the Nifty to 9,000 to 9,200 levels.
Can we expect volatility considering the upcoming state election results?
I do not rule out volatility in the market. It can be a healthy correction at the same time. It could be attributed to the outcome of the results of elections etc. But I believe the market is ready for a good rally despite some corrections.
How have you read earnings so far?
Unfortunately, analysts and journalists mixed up demonetisation and probably did not realise the benefit that the demonetisation activity brought to corporate balance sheets.
The earnings season reflects one thing, and that is most of the corporates’ balance sheets seem to be recovering. The month of November may have had some impact, but by and large, December along with October have given good results for the third quarter. Corporates have come up with satisfactory results, and I believe that the economy is progressing well.
Which are the sectors that you are most bullish?
Auto and auto ancillaries, banking and non-banking financial companies, some electrical and capital goods companies.