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Sensex to Hit 1 Lakh This Year?

Domestic equities crossed another milestone with Sensex crossing above 85,000 and Nifty crossing 26,000, reflecting robust buying across sectors….reports Asian Lite News

With the Sensex surpassing 85,000 for the first time, economists said on Tuesday that the Indian Indices can even reach the historic 1-lakh mark this year itself, given the robust bull run, strong investors’ sentiment and sound fundamentals.

Domestic equities crossed another milestone with Sensex crossing above 85,000 and Nifty crossing 26,000, reflecting robust buying across sectors.

Dr Manoranjan Sharma, Chief Economist at Infomerics Ratings, told IANS that Sensex crossing the magical 1 lakh mark this year cannot be ruled out due to a robust bull run.

“The 1 lakh mark will be reached shortly whether this year or early next year. It would be too steep a climb but India is certainly in the midst of a bull run in the stock market,” said Dr Sharma.

There are several positive factors for the current bull run the Indian indices are going through — like the US Fed rate cut, and the Chinese central bank taking a series of actions at the global level.

“At the national level, government policy continuity, strong foreign inflows, consumption picking up, capital expenditure doing well, and growth rate again doing well are the factors for the Sensex to touch new highs,” Dr Sharma told IANS.

The market momentum was further bolstered by a bullish outlook on India’s economic growth, supported by expectations of structural reforms and Investor optimism around the Indian economy’s ability to withstand global headwinds.

At closing, Sensex was down 14 points at 84,914 and Nifty was up one point at 25,940. Selling was seen in the banking stocks. Nifty Bank settled at 53,968, down 137 points or 0.25 per cent. In the Sensex pack, Tata Steel, Power Grid, Tech Mahindra, HCL Tech, M&M, JSW Steel, Wipro, Tata Motors, HDFC Bank, Sun Pharma, Bharti Airtel, Maruti Suzuki, TCS, and L&T were the top gainers.

According to economists, despite escalating geopolitical concerns in the Middle East, the Indian stock market remained resilient, with the Sensex and Nifty achieving new record highs for the fourth consecutive session.

‘7.1% Growth Ahead for India in FY25’

The Indian economy is projected to grow faster at 7.1 per cent this fiscal (FY25), Moody’s Analytics said on Tuesday, as the country continues to remain resilient amid global uncertainties.

In its new Asia Pacific outlook, the global credit ratings kept the country’s growth forecast unchanged at 6.5 per cent for 2025 while projecting faster growth of 6.6 per cent in 2026.

Moody’s Analytics projected better inflation outcomes, as it reduced India’s inflation forecast to 4.7 per cent from the 5 per cent predicted earlier. The country’s inflation remained below 4 per cent in July and August.

The 2025 and 2026 forecast was unchanged at 4.5 per cent and 4.1 per cent, respectively.

For the Asia Pacific region, Moody’s raised the 2025 forecast to 4 per cent from 3.9 per cent as projected earlier.

Exports have been a key driver for the region, but growth rests on an unstable footing. Key export drivers such as chips are losing steam. Global goods demand has been soft. And China’s policy-led ramp-up in exports has sparked protectionism abroad, said Moody’s.

Earlier in the day, S&P Global Ratings retained India’s growth forecast at 6.8 per cent for the fiscal 2024-25. The global ratings said that In India, GDP growth moderated in the June quarter as high interest rates temper urban demand, in line with our projection of 6.8 for GDP for the full fiscal year 2024-2025. The rating agency also retained India’s growth forecast for FY 2025-26 at 6.9 per cent.

According to the report, the Reserve Bank of India (RBI) considers food inflation a hurdle for rate cuts.

“Our outlook remains unchanged: we expect the RBI to begin cutting rates in October at the earliest and have pencilled in two rate cuts this fiscal year (year ending March 2025),” said the report.

The year-on-year inflation rate at 3.65 per cent, based on the All India Consumer Price Index (CPI), for August was the second lowest in the last five years. In July, the inflation rate (3.54 per cent) had fallen below the RBI’s medium-term target of 4 per cent for the first time.

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Sensex Trades Up on Positive Cues

The market trend remained positive. On the National Stock Exchange (NSE), 1,507 shares remained in the green and 480 shares remained in the red….reports Asian Lite News

Indian equity indices opened in the green on Wednesday following positive cues from Asian peers.

At 9.41 a.m., Sensex was up 82 points or 0.10 per cent, at 81,542 and Nifty was up 30 points or 0.12 per cent, at 24,887.

The market trend remained positive. On the National Stock Exchange (NSE), 1,507 shares remained in the green and 480 shares remained in the red.

The Nifty Midcap 100 index was at 58,792, up 169 points or 0.29 per cent and the Nifty Smallcap 100 index was at 19,146, down 60 points or 0.31 per cent.

Pharma, FMCG, metal, fin service and media indices were in the green. Realty, energy and PSU bank indices were in the red.

In the Sensex pack, NTPC, Asian Paints, JSW Steel, ITC, ICICI Bank, Bharti Airtel, HDFC Bank, Tech Mahindra, Tata Steel, Maruti Suzuki, HUL and Nestle were major gainers. Tata Motors, Power Grid, IndusInd Bank and Axis Bank were major losers.

Recently, SEBI proposed new rules for Futures and Options (F&O) trading to prevent speculation in the market.

According to the market experts, “SEBI’s crackdown on F&O trade is eminently desirable and can go a long way towards making the ongoing rally healthy and less speculative.”

“The irrational exuberance of the retail investors, particularly the newbies who entered the market after the Covid crash, will do more harm than good to the overall market in the long run,” they added.

There was a bullish trend in global markets. The markets of Shanghai, Hong Kong, Bangkok, Seoul and Jakarta were bullish. However, US markets closed mixed on Tuesday.

The foreign institutional investors (FIIs) extended their selling as they sold equities worth Rs 5,598 crore on July 30, while domestic institutional investors bought equities worth Rs 5,565 crore on the same day.

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Sensex target of 1 lakh eminently achievable

GREED & fear will certainly maintain the domestic demand focus in the long-only Indian portfolio which is geared into the housing cycle with a 17per cent weighting in real estate stocks. This portfolio remains broadly unchanged since inception on 1 July 2021…reports Sanjeev Sharma

The Indian stock market can almost double in the coming years. Greed & Fear, Christopher Wood’s famous column would like this week to signal that a target of a Sensex at 100,000 is now eminently achievable on a five-year view assuming a trend 15 per cent EPS growth and that a five-year average multiple of 19.4 is maintained.

Jefferies analyst, Wood in his column said the Sensex will hit 100,000 during FY27 or sometime in late 2026 based on such assumptions. The Sensex is currently 58,788.

This may seem an aggressive assumption. But in GREED & fear experience India has always been a stock market for growth investors with the multiple to go with it.

In a G7 world where value investors may finally enjoy an extended period of outperformance over growth, until at least the Fed performs another U-turn, India should be a prime object of focus for growth oriented equity investors, be they Asian and emerging market investors or global investors.

GREED & fear will certainly maintain the domestic demand focus in the long-only Indian portfolio which is geared into the housing cycle with a 17per cent weighting in real estate stocks. This portfolio remains broadly unchanged since inception on 1 July 2021.

The accelerating growth story is reflected in the rising earnings forecast. India looks set to record perhaps the best earnings growth in Asia this year with only Indonesia and the Philippines higher in terms of consensus forecasts. The consensus earnings growth forecast for the MSCI India this year is 20.3 per cent, compared with 11.3 per cent for the Asia ex-Japan region.

From a macro perspective GREED & fear remains most encouraged by the conclusive evidence last year that a housing cycle has commenced after a seven-year downturn, as discussed here on several occasions previously. This should translate in due course into a broader capex cycle which should be earnings positive and mean the stock market will prove to be surprisingly resilient in the face of rising interest rates. Money markets expect about 2-3 25bp rate hikes this year in India. On the housing cycle, Jefferies’ India office has recently noted that the surge in stamp duties on a country-wide level, up 59 per cent YoY in April-November, is a strong indicator of the improvement in the broader housing/property cycle, the report said.

If this is the promising backdrop, the two main risks to Indian equities are external. This is the Fed tightening cycle and a further spike in the oil price. On the Fed tightening issue, it is important to remember that the inflation problem is primarily an American and G7 one, not an Asian one. India has seen nothing like the monetary expansion witnessed in the G7 world in the pandemic era.

True interest rates have been negative in India but nothing like on the scale seen in America or the Eurozone. The real policy repo rate is now a negative 1.5 per cent with CPI inflation running at 5.6 per cent YoY in December, the report said.

This compares with the real central bank policy rate of negative 6.5 per cent in America and negative 5.3 per cent in the Eurozone. While the Reserve Bank of India stopped expanding its balance sheet last October. The RBI balance sheet peaked at Rs 64.4 trillion in October 2021 and is now Rs 63 trillion.

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