The markets closed the stellar week on a high, with the Sensex managing to close above the 10,000 mark for the second straight day. Midcaps too had an awesome Friday, closing the day with heady gains. At closing bell, the Nifty stood at 3,108 up 26 points, while the Sensex shut shop at 10,048 up 45 points.
Experts like Amitabh Chakraborty of Religare Capital Markets and Rajat Bose of rajatbose.com are bullish on markets. However, since the markets have seen a significant run up they do not rule out a correction in the short-term. Investors, they feel, should use these corrections to buy as the global risk appetite seems to have improved.
CFA, FRM, President-Equity at Religare Capital Markets, Amitabh Chakraborty, said there is further scope for markets to head up. “Foreign institutional investor cash buying has increased and also it’s a year of consolation for mutual fund NAVs and also insurance companies who are getting flows for equity markets. That is also getting deployed. So, I think some more room is left.”
Chakraborty see the Nifty touching about 3,300 in the short-term. But was quick to add that he sees a possibility of the market correcting as it have seen an about 25-30 per cent upmove. “It cannot continue like that.” He feels investors should use a correction to buy as global risk appetite seems to have improved.
Rajat Bose of rajatkbose.com shares Chakraborty view on the intermediate uptrend for markets. He expects a lot of positive surprises from corporate results in April.
He feels the Nifty is likely to face major resistance between 3150 and 3170 and thinks there is a greater possibility of it touching 3400-3500. "One is the simple moving average and the other one is the exponential moving average. This zone might well be tested in the next six weeks, which is the kind of time you have for elections. The markets are actually going to move up, but it won’t be one way traffic. There will be corrections and sell-offs lasting for a day or two at best, but overall the undertone will remain bullish."
He suggests investors to initially book profits in long positions and wait for a decline to re-enter. "This is an intermediate sustainable rally and is likely to continue. But there would be some course correction which I expect to happen early next week."
Similarly, CEO, Motilal Oswal AMC, Nitin Rakesh, said the market downsides are capped at this point. He said this is clearly a phase of struggle between the macros, the micros - the bottom-up numbers - not just in India but globally as well. "That really was leading to this current state of the market where people were not ready to believe that this is a sustainable rally. So, what started as a relief rally is now being seen as a disbelief rally. So, we cannot ignore the fact that there is a certain positive bias towards the rally and probably the downsides are capped at this point."
According to him, while the valuation and earnings risk are known and to some level and are limited, event risk that elections as well as monsoon that will follow pretty quickly to elections will clearly be an overhang on markets.
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