Mumbai: According to experts, markets have exhibited flamboyance and will continue to trade strong provided 13,300-13,400 is crossed decisively.
SP Tulsian, Investment Advisor, feels that markets will see short-covering in the coming week.
The factors influencing the markets are the industrial growth rate of 11 per cent and the growth rate of the companies.
Sumit Rohra of Antique Stock Broking said, “Outlook for next week looks promising”.
Markets have closed on a flamboyant note and it will be up provided that 13,300 is crossed decisively on Monday morning. Outlook for next week seems to be promising. Markets would continue to scale up their way as they have been going. Midcap participation is required for markets to maintain their momentum and which will soon happen.
Cues in the market are positive except that bull markets are eyeing a corrective phase. But India sentiment is so strong as of now and that Indian corporate numbers have been quite exciting, so markets look promising.
S P Tulsian of Investment Advisor said, “Fundamentals are playing an important role coupled with liquidity”.
Market is looking good at this point. Because of the strength in market we saw the bounce-back ( we went short on Wednesday). We will see short-covering taking place also in the coming week. Fundamentals are playing an important role coupled with liquidity.
Deven Choksey of KR Choksey Sec said, “Markets to cross 13,400 to maintain the uptrend”.
Markets are headed towards 13,400 and we have further continuity in the markets if it successfully crosses this level. A small correction at these levels is not ruled out. The factors influencing the markets are the industrial growth rate of 11 per cent and the growth rate of the companies.
Surjeet Bhalla of Principal O(x)us said, “Markets may consolidate 2-3 per cent”.
From a short-term perspective, it always looks like now the markets should consolidate, take a breather. But we have gone from around 8,800 to 13,000 plus now, with minor dips, about 2-4 per cent consolidation. So if you are saying will we get 2-3 per cent consolidation, then yes, but if you say the market may see a significant correction of about 8-10 per cent, then I am not buying that. We are not cautious for the reason that we think that the market will decline 8 per cent.
Manishi Raychaudhuri of UBS said, “Lot of money waiting to be invested in the market”.
I think on the technical side, there is quite a lot of money still waiting to be invested in this market. If you look at the domestic institutional investors, they alone are sitting on close to $3.5 billion to $4 billion of cash. Even FIIs are by and large neutral to underweight on India right now.
There could be some degree of feeling of being left out in these rallies. So since the fundamental stories remain strong, any correction could result in these funds flowing back into the market.
Markets may correct anywhere between 7-10 per cent, but it won’t be a very deep correction:
As long as we are in an environment of increasing earnings estimates, where earnings estimates are being upgraded on a daily basis, we think that valuations have kind of achieved position of secondary importance. That is because what is appearing as slightly expensive today may suddenly appear cheap tomorrow because the earnings estimates get upgraded.
Having said that, I would also point out that at the present valuation at both 17.3 times one year forward, I think the market is appearing fully valued. So there could be the possibility of the market taking a breather over the near term and it may correct anywhere between 7-10 per cent, but I don’t think it will be a very deep correction.
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