Nifty 50 May Touch 13,500 As Economic Activity Improves: Systematix Group
While there are some localised lockdowns, all leading indicators show recovery is on track, Systematix’s Dhananjay Sinha says.
The Nifty 50 Index may rise to 12,000 points, with an upside of 13,500 points, in the next 18 months as economic activity in India gains some momentum, according to Systematix Group.
There is a cumulative momentum in the equity markets on the back of abundant liquidity, higher retail investor participation, improvement in global trade and India’s leading economic indicators, Dhananjay Sinha, director and head (Institutional research) at the investment management and advisory services provider, told BloombergQuint in an interview.
Indian equities in March had tracked global peers in the worst selloff in more than a decade after the coronavirus pandemic froze economic activity. Since then, the Nifty 50 has recovered 50% to trade above 11,300 points as the government announced relief packages and the central bank offered fiscal and monetary stimulus. And the benchmark continues to look past dire economic forecasts and mounting cases of infections.
“What the market is looking at is whether the rising numbers are really hampering the trajectory of growth. My sense is that while there are some localised lockdowns, all leading indicators are telling us that recovery is on track,” Sinha said.
As money flows in, Sinha expects the broader markets to perform better, with high net worth individuals the first ones to participate in the opportunity presented by the non-Nifty 50 stocks. The momentum, however, is specific to some stocks. “There are companies that are showing decent traction, who have got reasonably strong long-term growth stories. That's where the money is moving in.”
Watch the full conversation for Systematix Group's view on banks and NBFCs.