The day doesn’t look far once the Nifty50 is probably hit a five-digit number for the first time. The journey, so far, conjointly sends out a message to investors that one should not worry much concerning the ups and downs of the financial world and keep invested.
After hovering at four-digit level for the past 20 years, the 50-share index looks poised to cross the psychologically necessary 10,000 mark this financial year on probably recovery in earnings and political stability.
The index that was trading on top of the 6,000 mark before the global financial crisis of 2008 had slipped below the 3,000 level in November 2008. However, with associate rising economy, capitalist sentiment and liquidity flows, the index managed for U-turn.
The equity index recently crossed the 9,200 mark for the first time after the BJP, led by Prime Minister Narendra Modi, won elections in the most inhabited state Uttar Pradesh. The NSE Nifty closed at 9,218 on March 20.
VK Sharma, Head of Private Client Group (PCG) at HDFC Securities, said the Nifty50 will touch 10,800 by the end of March 2018 on ample liquidity from native additionally as foreign investors (FIIs), stable inflation, a strong local currency and a shift in the political narrative from caste/creed to development and growth. Improvement in consumption also supports sentiment, because the young human ecology demands better quality of life.
G Chokkalingam, Founder of Equinomics advisory and analysis, expects the 50-share index to rise around 15 per cent in next 12 months. “With government’s efforts, both GDP and company earnings should get some elevate in next quarters,” he said.
On a median, the rupee has depreciated around four percent each year in recent times. However, Sharma of HDFC Securities expects the domestic currency to stay stable in this year with a little bias towards appreciation.
“India among the fastest growing economy and recent state election victory provides government mandate for reforms. Expectation of better foreign fund flow along with smart forex reserve will further boost the currency in coming months,” he said.
He feels the rupee can appreciate to 62 against the dollar by the end of next financial year on robust FDI and FIIs inflows in the coming months.