Reliance Industries To Fuel Nifty’s Jump To 9,660 By Mid-2017, Says Jai Bala
Indian equity benchmarks climbed for a 5th straight session, led by Reliance Industries
Last November, when Indian equities were reeling from the double whammy of Donald Trump’s surprise win in the U.S. presidential elections and an unprecedented currency ban, technical analyst Jai Bala had told BloombergQuint that he expected Nifty 50 to touch 9,660 by middle of 2017.
Three months later, Indian stocks climbed for the fifth straight session on Wednesday, with key benchmarks hovering near their one-year highs on the back of a record rally in index heavyweight Reliance Industries Ltd. (RIL).
The Mukesh Ambani-promoted group company rose nearly 11.2 percent and was the biggest gainer on both the Sensex and the Nifty 50 after its telecom unit announced plans to begin charging for services from April 1, 2017. The 50-share Nifty index closed at 8,926.9 on Wednesday.
“When the market bottomed at 6,825 in the middle of 2016, we were very clear it is going to get to 9,660. It would be just a matter of time,” Bala reiterated in a phone conversation with BloombergQuint on Wednesday.
“I have been bullish on Reliance Industries all through 2016,” said Bala, adding the perfect buying opportunity was when the stock price was trading between Rs 900-1,000. “We are expecting a minimum of Rs 1,700 and a very optimistic Rs 2,100 on Reliance Industries,” he said.
Nipun Mehta, the founder and chief executive officer of Blue Ocean Capital, agreed that Indian equities are headed higher but may see a correction before that.
“If you see the market breadth, it was quite negative. The index was pulled higher mainly by RIL today (Wednesday), and HDFC Bank Ltd. a day before. So this is more a rotational move, rather than a secular up move, which is not necessarily a bad thing,” Mehta told BloombergQuint in an interview.
Mehta said there will three major reasons for the market to correct in the near term: Uttar Pradesh elections outcome, an earlier-than-anticipated Fed interest rate hike and Trump administration’s “phenomenal” tax plans.
A correction when it comes would be an ideal way for the market to move higher, said Bala, adding the trend doesn’t change even if the Nifty falls to 8,600. “We know the path from A to B, which is from here to record highs, but the exact path will be difficult to chart,” he said.