Sensex, Nifty Hit Fresh Highs: Here’s What Market Experts Had To Say
Indian benchmarks have scaled new highs as foreign investors pumped in the most since March.
The Nifty 50 rallied 58 points to scale an another all-time high, a day after the Sensex hit a new milestone.
That comes as foreign investors have pumped in Rs 18,154 crore so far this month, according to data compiled by the National Securities Depository Ltd. It’s the highest monthly inflow since March.
Here’s what the market experts had to say:
India Has Hardly Lost Money In Two Years Following Elections: Saurabh Mukherjea
The current rally is a “familiar territory” as the markets have gained 27 percent annually on an average in the two years after a general election compared to the long-term average of 14 percent, according to Saurabh Mukherjea, founder of Marcellus Investment Managers.
“The reason this happens is that typically economic reforms come after elections and the markets discount those reforms,” Mukherjea said in an interview to BloombergQuint. “Hold your nerve through what is a really difficult economic climate and buy high-quality names where history shows you make healthy returns even if the economy takes longer to recover than anybody expects.”
Mukherjea also downplayed the theory that every new rally will be led by new leaders.
The nature of economic reforms like goods and services tax, demonetisation suggest that the economy will be concentrated in the hands of a few economic market leaders. The entire informal industry is going to fold up and companies such as Asian Paints Ltd., Pidilite Industries Ltd. and Relaxo Footwear Ltd. are going to be massive beneficiaries of that.Saurabh Mukherjea, Founder, Marcellus Investment Managers
Bleeding Small Caps Are ‘The Real Problem’, Says Basant Maheshwari
The Nifty 50 may be trading at a record highs but that may not be a cause for comfort, according to Basant Maheshwari, co-founder of Basant Maheshwari Wealth Advisers LLP.
The (Nifty) small-cap index is 47 percent off its record high. (That) portfolio is bleeding. That’s the real problem.Basant Maheshwari, Co-Founder, Basant Maheshwari Wealth Advisers LLP
Foreign institutional investors, he said, are net short in the derivatives market and haven’t covered their shorts yet. That, according to him, would decide whether the Nifty would sustain its record high. “If you go by anecdotal historical evidence, till the time foreign investors go net long in the derivative markets, Nifty does not sustain its all-time high.”
To decisively move towards 12,500-13,000, which Maheshwari expects to happen in the next three-four months, foreigners must buy “big, lock, stock, and barrel”.
Stressed Sectors Are Bottoming Out, Says Hiren Ved
Worst of the macro-economic conditions are over for the current financial year and the markets are discounting the growth ahead, a situation that is similar to 1992 after the economic crisis or 2009 after the global financial crisis, said Hiren Ved, director and chief investment officer, Alchemy Capital.
“We have seen the macro economy and growth, and markets tend to look ahead and not behind,” said Ved in an interview to BloombergQuint. “Stressed sectors like state-owned banks, non-banking lenders, telecom and real estate are off their lows and are acting as immediate triggers.”
Ved expects the financial year 2020-21 to be “phenomenal” for stock markets even if the economy may still be treading a painful but a steady recovery path as stock markets tend to factor in future events early.