Market hits record highs, Right funds to invest !!
We are only at the beginning of the current financial year but stock markets have already marched towards record highs. For the first time, Nifty traded above 9200 mark. To be precise, Nifty touched a high of 9273.90 last week. Sensex is inching towards 30,000.
When the indices are at the all time highs, retail investors are confused about the market direction in the upcoming trading sessions. Every time market records a high, investors have always feared a downtrend. At this point, we consulted stock market adviser Reji Thomas about the market trend for the next one year.
"When the markets are trading in record highs, investors should keenly watch the international happenings. Interest rate hikes in USA should be observed. Crude oil manufacturing remains a major problem. Regardless of where a war breaks out, crude oil price is the first thing to shoot up. If oil price raises, it will have a huge impact on Indian Markets.
Considering Indian markets - measures to curb black money, UP election results, GST and international economic situations are favorable. Hence, it is expected that Foreign Investments continue to flow into our country. Currently, domestic investors are investing more through mutual funds. That too, equity investments are on a rise.
Nifty to touch 10,000
In the current scenario, better market performance is due to major equity investments coming from the mutual funds. Usually, equity based investments are not liquidated immediately. The investments remain for a long time. Furthermore, investors prefer to add more funds periodically. When such consistent investments are made by domestic investors, markets tend to remain in a positive phase.
Though we cannot predict the future market exactly, it is expected to perform well due to the current political, economic and international factors. Already peaked out indices can move towards further highs.
Nifty may reach 10,025 levels within the current financial year. Sensex can go upto 32,800 to 33,140 points. In the current year, nifty can trade between the support level of 7890 and a resistance level of 10,025. If the support of 7890 is broken by Nifty, 6825 will be the next support.
Sectors that can perform better
Considering the sectors for investment, Entertainment industry is expected to shine. Retail and Metal sectors will also perform better. Consumer goods, telecom and data related industries can show a vast improvement.
Due to current drought condition across the country, future of agriculture sector remains a big question mark. Food product rates are expected to shoot up. Though manufacturing sector is performing better now, we should wait for seeing further improvement. Aviation sector is growing in a fairly high pace. There is no doubt about continued performance of Automobile and spare part manufacturers.
Pharma sector is expected to perform better considering a long term view. There are good chances for power industries to perform well. We have been facing acute power shortage so far. But now we are exporting the excess 5000 Mega watt power. Hence, power sector will continue to develop.
Investments can be made in Entertainment sector in shares like PVR and Inox. In aviation sector, SpiceJet, Jet Airways and Indigo can be preferred. Future Retails and West Life can be opted in Retail. Apollo Tyres, L&T, HDFC Bank, Yes Bank are ideal shares for investments.", said Reji Thomas.
When asked about right shares to invest in the current market scenario, Mr. A. K . Prabakar, Equity Research Head of IDBI Capital, he added the following.
"Current financial year is perfect for stock markets. There will always be ups and downs in the market. Although, there cannot be huge downside from here. Nifty can hit 12,000 in the current year. Sensex is expected to raise upto 38,000 points.
Wherever there is market intrusion in unorganized sector, those areas will start growing. It is because, factors such as demonetization and GST are driving unorganized sector into organized ones. This change will be favorable for the investors.
Factors to be noted
No need to panic due to record high levels of the market. Decent returns are possible, if investments are made in the right shares. It is highly necessary to note whether the company has remained profitable in the past five years.
It is also required to note whether the market capitalization has increased and if the earnings have shown consistent improvement. Company's ROE being greater than 15%, margin positions and dividend yields are the other factors to be considered.
Finally, before buying a share, a thorough research should be made to justify the reason for investing in that company. Buying should never be made solely based on others' opinion. If continued investments are made on good shares though SIP, it will definitely yield consistent returns."
Stocks to Invest
We can expect IT sector to perform better in the current financial year. Particularly, Large and Mid cap shares in IT are expected to show good performance. In IT Mid cap, MindTree, Persistent Systems and Tata Elxsi can give considerable returns.
Apart from these, Zee Media, Zee Industries, Indo Count Industries, Trident, Arvind Ltd, Century Ply, Pidilite Industries, Nilkamal, Supreme Industries, Finolex Pipe, Cholamandalam Investment and Fin Co Ltd, Coramandel International and Shoppers Stop in Retail can perform better. You can very well invest in these stocks and yield good returns.
Though market sees a downside, it will continue to recover and hit newer highs. Nifty can hit 16,800 in 2020."
In India, interest rates will continue to fall in the future. From July, GST will become effective. With recent election results, we can see that BJP has started to gain power in state legislatures too. Due to these reasons, it is evident that markets will continue to grow. So, why don't you start investing in good funds right now ?
When the indices are at the all time highs, retail investors are confused about the market direction in the upcoming trading sessions. Every time market records a high, investors have always feared a downtrend. At this point, we consulted stock market adviser Reji Thomas about the market trend for the next one year.
"When the markets are trading in record highs, investors should keenly watch the international happenings. Interest rate hikes in USA should be observed. Crude oil manufacturing remains a major problem. Regardless of where a war breaks out, crude oil price is the first thing to shoot up. If oil price raises, it will have a huge impact on Indian Markets.
Considering Indian markets - measures to curb black money, UP election results, GST and international economic situations are favorable. Hence, it is expected that Foreign Investments continue to flow into our country. Currently, domestic investors are investing more through mutual funds. That too, equity investments are on a rise.
Nifty to touch 10,000
In the current scenario, better market performance is due to major equity investments coming from the mutual funds. Usually, equity based investments are not liquidated immediately. The investments remain for a long time. Furthermore, investors prefer to add more funds periodically. When such consistent investments are made by domestic investors, markets tend to remain in a positive phase.
Though we cannot predict the future market exactly, it is expected to perform well due to the current political, economic and international factors. Already peaked out indices can move towards further highs.
Nifty may reach 10,025 levels within the current financial year. Sensex can go upto 32,800 to 33,140 points. In the current year, nifty can trade between the support level of 7890 and a resistance level of 10,025. If the support of 7890 is broken by Nifty, 6825 will be the next support.
Sectors that can perform better
Considering the sectors for investment, Entertainment industry is expected to shine. Retail and Metal sectors will also perform better. Consumer goods, telecom and data related industries can show a vast improvement.
Due to current drought condition across the country, future of agriculture sector remains a big question mark. Food product rates are expected to shoot up. Though manufacturing sector is performing better now, we should wait for seeing further improvement. Aviation sector is growing in a fairly high pace. There is no doubt about continued performance of Automobile and spare part manufacturers.
Pharma sector is expected to perform better considering a long term view. There are good chances for power industries to perform well. We have been facing acute power shortage so far. But now we are exporting the excess 5000 Mega watt power. Hence, power sector will continue to develop.
Investments can be made in Entertainment sector in shares like PVR and Inox. In aviation sector, SpiceJet, Jet Airways and Indigo can be preferred. Future Retails and West Life can be opted in Retail. Apollo Tyres, L&T, HDFC Bank, Yes Bank are ideal shares for investments.", said Reji Thomas.
When asked about right shares to invest in the current market scenario, Mr. A. K . Prabakar, Equity Research Head of IDBI Capital, he added the following.
"Current financial year is perfect for stock markets. There will always be ups and downs in the market. Although, there cannot be huge downside from here. Nifty can hit 12,000 in the current year. Sensex is expected to raise upto 38,000 points.
Wherever there is market intrusion in unorganized sector, those areas will start growing. It is because, factors such as demonetization and GST are driving unorganized sector into organized ones. This change will be favorable for the investors.
Factors to be noted
No need to panic due to record high levels of the market. Decent returns are possible, if investments are made in the right shares. It is highly necessary to note whether the company has remained profitable in the past five years.
It is also required to note whether the market capitalization has increased and if the earnings have shown consistent improvement. Company's ROE being greater than 15%, margin positions and dividend yields are the other factors to be considered.
Finally, before buying a share, a thorough research should be made to justify the reason for investing in that company. Buying should never be made solely based on others' opinion. If continued investments are made on good shares though SIP, it will definitely yield consistent returns."
Stocks to Invest
We can expect IT sector to perform better in the current financial year. Particularly, Large and Mid cap shares in IT are expected to show good performance. In IT Mid cap, MindTree, Persistent Systems and Tata Elxsi can give considerable returns.
Apart from these, Zee Media, Zee Industries, Indo Count Industries, Trident, Arvind Ltd, Century Ply, Pidilite Industries, Nilkamal, Supreme Industries, Finolex Pipe, Cholamandalam Investment and Fin Co Ltd, Coramandel International and Shoppers Stop in Retail can perform better. You can very well invest in these stocks and yield good returns.
Though market sees a downside, it will continue to recover and hit newer highs. Nifty can hit 16,800 in 2020."
In India, interest rates will continue to fall in the future. From July, GST will become effective. With recent election results, we can see that BJP has started to gain power in state legislatures too. Due to these reasons, it is evident that markets will continue to grow. So, why don't you start investing in good funds right now ?
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