One Of India’s Top Hedge Funds Sees A Limited Downside To Nifty 50
The Bombay Stock Exchange (BSE) building stands in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

One Of India’s Top Hedge Funds Sees A Limited Downside To Nifty 50

India’s benchmark Nifty 50 index could touch 12,500 by the end of December and the downside is limited, according to Andrew Holland of Avendus Capital Alternate Strategies.

Also, corporate earnings will recover by the first quarter of the financial year ending March 2021, Holland, chief executive officer at one of the nation’s largest alternative investment funds, told BloombergQuint in an interview.

The corporate tax cut gave a bottom to the earnings downgrade seen by Indian companies, he said. While some companies in the farm sector will still see downgrades, most large companies have performed in line or surprised estimates in the second quarter, according to Holland.

India’s Nifty 50 Index has risen nearly 6 percent so far this year—most of the gains came after India unexpectedly slashed corporate tax rates on Sept. 20. The benchmark index is currently trading at around 11,900.

On the broader markets, Holland said while some pockets are already looking more attractive, they will only move up as a whole when the market sees evidence of an economic recovery.

“We might be one quarter away from the broader market really taking off,” he said, adding companies that reduce costs and improve efficiency will be the first beneficiaries of the economic upturn.

WATCH | Avendus Capital's Andrew Holland on Nifty and Q2 results so far

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