Sanjiv Bhasin of IIFL Securities expects a new high for Nifty soon

Market


IIFL Securities Director Sanjiv Bhasin expects the outperformance of Indian stock markets to continue. And he also expects a new high for Nifty this month. Despite global markets taking a knock today after Fed’s latest announcement, Indian stock market benchmarks Sensex and Nifty were mostly flat in noon trade. The benchmark indexes fell as much as 0.6% each in early trades tracking decline in other Asian markets and Wall Street overnight but later recovered. 

Overnight, the Fed raised rates 75 basis points for the fourth time in a row, bringing the top of its target range to 4%, the highest level since 2008, but signalled smaller rate hikes ahead. “The Federal Reserve acknowledged that the future rate uptick will take into account cumulative rate hikes so far, the lags with which monetary policy affects economic activity and inflation as well as economic and financial developments,” said Kunal Valia, Chief Investment Officer – Listed Investments, Waterfield Advisors. 

But chairman Jerome Powell said the Federal Reserve would raise interest rates more than previously anticipated, sapping risk appetite.

“Federal Reserve has lost credibility. They are speaking in different tones. Some members being dovish while the chairman being hawkish. FOMO (fear of missing out) is huge for foreign investors who are now buyers since last week. Retail flows are calling the shots. Expect the Fed news to get discounted by end of the day. New highs on the cards in November,” Mr Bhasin said. 

Analysts say FII buying of 12610 crores during the last five trading sessions can provide support to the market at lower levels.

“Our market has not reacted too negatively till now because we have been seeing good foreign investor inflows in the last three-four days,” said Neeraj Dewan, director at Quantum Securities.

“There have been pretty strong corporate results. What the Fed does will be data dependent.”

Focus will now turn to U.S. jobs data on Friday, which could offer some cues on future interest rate hikes.

Large-cap banks, capital goods and the premium auto segment can be bought on declines, according to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“India’s outperformance is likely to continue since leading indicators like credit growth, capital expenditure and auto sales point to robust economic recovery,” he said. 

 

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