Nifty50 hits 17,000 for the first time! Market gurus analyse road ahead

SUMMARY

Nifty50, one of India's two equity benchmark indices scaled Mount 17,000 on the last trading day of August. The index closed 200 points or over a percent higher at 17.132. Here's how the market hawks are reading the rally and near-term outlook.

By CNBCTV18.comAug 31, 2021 7:11:04 PM IST (Updated)

Anand Tandon, Market Expert: I don’t know if this is the market like any that we have seen in the past. Clearly, there is a lot more money than any other cycle in the past. So for now just simply follow the market and there is no particular reason why you should panic. I still believe that the trigger for any reversal will happen overseas and not in India. From that perspective, given the fact that China has been moved out of the equation for most investors, I think what we are seeing in the overflow of money coming into India and till that lasts we are still good.

Vikas Khemani, Founder, Carnelian Capital: Nothing changes in my view of the evolving long term India story, it is one more milestone. Markets tend to consolidate, markets tend to rise sharply, so it's a common function. For long market consolidated between 15,500 to 16,000 Nifty levels. So, post-Fed comments market started putting behind the worry which it had in the short term. I think India is a very promising market in the world and over the next four to five years, India looks very interesting. You will always see sometimes the market will rally ahead of expectations, sometimes it will correct or overcorrect. This is a part of any journey of a bull market, nothing goes one way. So I would say that no one should think the same way and approach the market more from a medium-term to long term perspective rather than a short term view.

Mehraboon J Irani, Market Expert: We need to understand also, appreciate, accept, recognize that the large-caps, the frontline stocks had virtually taken a backseat over the last few months. So, what we saw in August was the IT index, the HDFC twins, the Bajaj twins virtually leading the market. Now going ahead, it is distinctly possible the Bank Nifty could come to the fore like what I have been mentioning over the last three or four weeks, that was the time the Bank Nifty now comes to the front and leads the market. It is Reliance Industries Ltd, it is Bharti Airtel, ICICI Bank – one of the frontline banks with a little heavy weightage. So, if all the stocks move, you could possibly see the Nifty going up further. What has happened, but in the meantime, is that the midcap and smallcap index have taken a backseat, have given negative returns while the Nifty has gone up by 1000 points. Now, this is something that investors will need to accept. Now should we move to large caps? I think in an environment in which every passing day, we sleep thinking that will the markets be up tomorrow, there is definitely a concern because of the negatives around but with the tapering possibly taking one of the sides, the concern right now mainly is that the third wave as far as COVID goes. Every night you sleep thinking that will the markets be up tomorrow - so some risk aversion definitely could come and people could possibly start shifting a little bit from midcaps and small-caps into the frontline stocks and that type of thing can happen and portfolios possibly for the first time in many months could start underperforming the frontline indices. That is my personal view.

Pratik Gupta, Kotak Securities: The Nifty is currently trading at about 23 times the current year’s earnings, almost 20 times FY23 earnings. India has had a phenomenal outperformance versus other emerging markets (EMs). India’s Nifty is up 16 percent year-to-date (YTD) whereas the global MSCI EM index is actually flat, China is down 4 percent. India stands out as a pretty strong outperformer and the feedback we get from a lot of global institutional investors is that India is expensive, tough to deploy more money into India. Given the risks of possibly a third wave of COVID-19 which may or may not pan out but the bigger risk is of the US Fed. At current valuations, we are a bit cautious right now.

Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities: Markets continued its strong performance as benchmark Nifty successfully cleared the 17,000 marks on the back of a broad-based rally. In the last three trading sessions, the Nifty has rallied over 580 points as investors are placing bullish bets after worries of the US Fed's decision on interest rate hikes dissipated. The medium-term trend is still positive and likely to continue in the near future. However, day traders may take a cautious stance near the 17,200 resistance level. The 16,980 levels would be a sacrosanct support level for the swing traders, and above the same, the uptrend momentum could continue up to 17,200. On an extended rally, the upside may continue further, which could lift the index up to 17,275. On the flip side, a strong possibility of a quick intraday correction up to 16,900 is not ruled out if the index succeeds to trade below the 16,980 support level.

Santosh Meena, Head of Research, Swastika Investmart: Bulls are roaring in Indian markets and we saw big gains for the second day in a row in Nifty and Sensex where they both achieved a new milestone by giving a close above 17100/57500 respectively. We are outperforming global markets where a move above 17000 in Nifty pushed bears on backfoot and that caused a big short-covering rally today as threatened bears are the biggest bulls for the market. We were doing well despite the lack of buying by FIIs and we got momentum once FIIs start to show buying interest post Jarrom Powell's speech.BankNifty is still struggling to cross an important hurdle of 36500 levels but once it manages to sustain above this level we may see a sharp rally towards 37200/37700 level. 36000 is immediate and important support and if it again starts to trade below this level then we can expect some weakness. The market will react to Q1 GDP numbers tomorrow while Global cues will be also important but we may continue to outperform and the market may continue its rally if there will be no major negative global cues. Rising covid cases in the US could be a near-term concern for the global markets.

Rahul Sharma, Co-Founder, Equity99: Both Nifty and Sensex touched the mark of 17,000 and 57,500 making their new lifetime high. The market is making new high daily on positive global clues. The rally is expected to continue unless there is any change in global clues. 100 percent margin will be set by tomorrow as instructed by SEBI and volumes might get a lower incoming session, we would advise short-term players to be very cautious as profit booking might take place at higher levels use of strict stop loss will be recommended.

Ashis Biswas, Head of Technical Research at CapitalVia Global Research: The market has reached an important resistance level of 17000. It is suggested that if the market sustains above the level of 17000, the market expects to gain momentum, leading to an upside projection till 17200-17250 level.

On midcaps | Prakash Diwan, Market Expert: In the midcap space, there is a very clear rotation that is happening where undervalued stocks – some of them probably from new themes like recycling and electric vehicles and things like that, vehicle scrappage policy being imminent, there seem to be some new triggers there but otherwise I think sugar, speciality chemicals, some of these sectors seem to be a bit overdone and you need to be a bit cautious given the stretched valuations.

Ajit Mishra, VP - Research, Religare Broking Ltd: Markets traded buoyant for yet another session and gained over a percent. The beginning was muted amid mixed cues however healthy buying across sectors such as financials, metal and pharma aided Nifty to test a new milestone i.e. 17,000. Finally, it ended near day’s high at 17,100 levels, up by 1 percent. The broader markets too remained optimistic and ended in the range of 0.6-0.7 percent. It’s been a phenomenal move in Nifty as it inched from 16,000 to 17,000 in August month, after spending nearly two months in consolidation. Going ahead, participants will first react to GDP data in early trade on Wednesday i.e. September 1. Besides, the auto sales will also start pouring in. We reiterate our bullish view on markets, with a focus on stock selection. The catch-up move in banking would now be the next deciding factor for the prevailing momentum to continue.Markets traded buoyant for yet another session and gained over a percent. The beginning was muted amid mixed cues however healthy buying across sectors such as financials, metal and pharma aided Nifty to test a new milestone i.e. 17,000. Finally, it ended near day’s high at 17,100 levels, up by 1 percent. The broader markets too remained optimistic and ended in the range of 0.6-0.7 percent. It’s been a phenomenal move in Nifty as it inched from 16,000 to 17,000 in August month, after spending nearly two months in consolidation. Going ahead, participants will first react to GDP data in early trade on Wednesday i.e. September 1. Besides, the auto sales will also start pouring in. We reiterate our bullish view on markets, with a focus on stock selection. The catch-up move in banking would now be the next deciding factor for the prevailing momentum to continue.