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Sensex: Life after 30000

LiveMint logoLiveMint 08-05-2017 Ami Shah

Mumbai/Singapore: The Sensex, the benchmark index of BSE, may have fallen below 30,000 points in recent sessions, but 10 stock market experts interviewed by Mint say the India story is very much intact, although they expect a correction. The more optimistic among them even expect the beginnings of an earnings recovery this financial year.

Mark Mobius, executive chairman, Templeton Emerging Markets Group

First of all, the tax rules are being changed, and that is a big, big win. The fact that Prime Minister Narendra Modi has been successful in the (recent state) polls also gives people confidence that the ongoing reforms will continue. Read more

Earnings expectation: A recovery by the end of 2017

Jim Rogers, chairman, Rogers Holdings and Beeland Interests

What is driving Indian markets is also driving other markets. There are massive amounts of money around, and it needs to go somewhere, and it is going into the markets. India is not the only one going through the roof—look at Europe and America. Read more

Earnings expectation: An earnings recovery has not taken place and the markets are going up. This is a problem globally.

Gautam Chhaochharia, head of research, UBS Securities India

Our Asia and EM (emerging markets) strategists prefer India relative to other markets in the region, given a better growth profile, macro stability, reforms underway and planned, central bank monetary policy path and relative earnings and market outperformance expectations. Read more

Earnings expectation: We expect earnings growth to improve gradually from single digit likely in FY17 to 12% in FY18 and 17% in FY19

Sanjay Mookim, India equity strategist, Bank of America Merrill Lynch

Much of the recent increase in Indian equities can be attributed to global and, more specifically, the emerging markets equity rally. Concerns around the economic disruption from demonetization seem to have been overdone. Read more

Earnings expectation: 12% in 2017-18

Saurabh Mukherjea, CEO, Ambit Capital

The rally in the Indian markets is driven by a surge in liquidity. However, unless there is an economic recovery in India, there is no fundamental support for such a rally. Read more

Earnings expectation: Earnings are not expected to recover in FY18 as we are unlikely to see growth in capex.

Sankaran Naren, CIO, ICICI Prudential AMC

Macro fundamentals of Indian economy in terms of the fiscal deficit, current account deficit and inflation are in good shape. There was a sharp increase in financial savings and inflows into mutual funds. Economic cycle, along with earnings growth, is likely to improve over the next two years as we see the credit growth and capex cycle turning favourable. Read more

Earnings expectation: Difficult to predict on a quarterly basis

Sanjeev Prasad, senior executive director and co-head, Kotak Institutional Equities

Given the limited scope for a further improvement in the macroeconomic situation and meaningful reforms (the government has already completed a large part of reforms expected from it at the beginning of its term), the market rally will sustain only if it is supported by earnings recovery. Read more

Earnings expectation: 16% growth in net profit for Nifty-50 companies

Manishi Raychaudhuri, Head of Asia (ex-Japan), equity strategy, BNP Paribas Securities

A combination of liquidity and better market sentiment has driven this rally. In the near term, however, a correction appears likely. India’s valuation premium over the rest of Asia and relative to the market’s own history has gone to between 1 and 2 standard deviations above the long-term average, while earnings estimates have continued to drift. Read more

Earnings expectation: 12-13% in 2017-18

Rashesh Shah, chairman, Edelweiss Financial Services

Going forward, the macro factors are going to remain robust and will further drive the market. In parallel, I do see FIIs coming back strongly with the global economy and EMs also on an upswing. Read more

Earnings expectation: An across-the-board improvement will take around 12-18 months.

Shankar Sharma, vice-chairman and joint managing director, First Global Securities

The bull market in small caps has just actually started as it only recently took out its 2007-08 highs. Read more

Earnings expectation: I don’t see a marked recovery in large-cap earnings.

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