After a sturdy 118% rally in 73 weeks, upside from present levels may perhaps be restricted for the benchmark Nifty 50 index. Satish Menon, Executive Director at Geojit Financial Services, in an interview with Kshitij Bhargava of TheSpuzz Online says he expects Nifty to be in the variety of 16000-16500 by March 2022. He additional added that valuations, though down from their all-time highs are nevertheless trading properly above their 5-year averages. On the correction in the midcap and smallcap space, Satish Menon is not as well worried but sees it as a a great deal-required correction soon after the stellar run because April 2020. Here are the edited excerpts.
What triggers do you see for domestic markets this fiscal year? Where do you think Nifty will be by March 2022?
The important trigger will be the unlocking of the international and domestic economies. We can anticipate moving more rapidly towards normalization by the finish of March 2022. Because of this, we can count on interest yields to boost, which is an critical aspect to bring development in genuine enterprise. Regarding Nifty 50, we had a target of 16,165 for December 2021 finish, which has been reached and is now trading above our marketplace target. Our view is that the markets would be in the variety of 16000 to 16500 in March 2022.
Sensex, Nifty are close to lifetime highs what do you make of valuations appropriate now?
Valuations are at a historically higher band variety. They have corrected by about 5 % from the all-time higher and are at present trading about 20 % above the 5-year averages. It was supported by higher earnings development forecast, the glut of liquidity, and higher fiscal and monetary help. We can count on this higher trend to normalise more than the medium term.
Small caps and midcaps had a excellent run but lately have began correcting, is it a sign of be concerned?
It is not a large be concerned but yes it will be a concern in the brief-term. The marketplace required correction in mid and smaller caps to bring parity in the marketplace segments soon after the super rally from 2020 low. During this quarter, we have been recommending partial profit booking. Investors have to grow to be stock selective and raise the mix of substantial caps in your portfolio. This is in anticipation of long-term demand and provide law, provided elevated marketplace trends and valuations.
Infrastructure is anticipated to be a large theme in the coming quarters, do you think that? Are there any unique stocks you are seeking at?
As the economy moves towards normalcy, core industries like Infra, building, capital goods, auto and banking will be the key beneficiaries. At the similar time, broad marketplace is in a consolidation mode, so we require to be stock precise in the course of the period. We can count on the infra market to outperform the broad marketplace in the future. Few stocks on which we have positive suggestions on lengthy-term basis are L&T, KNR Construction and ICICI Bank.
What themes do you think are incredibly eye-catching at this juncture that investors really should be tracking?
New economy stocks will be the most eye-catching for the investors due to the higher development price, upcoming enterprise model relating to net, marquee investors and higher valuations demanded by such organizations. These are superior firms to invest in for the lengthy term, but in the brief term, one really should be prepared for enhanced volatility based on valuations. Also, sectors like Chemical, Sugar, Electrical Manufacturing and Pharma will be in higher demand due to the government’s policy reforms and higher international resource sourcing demand from India.