The Nifty will cross the record high, but to stay above that, the markets will need a positive news flow that will improve the macro fundamentals for the Indian markets and thereby earnings of multiples, Shrikant Chouhan of Kotak Securities says in an interview to Moneycontrol.
On Bharti Airtel, technically, he think it should cross Rs 1,000 mark by December-end as it has broken out of the trading range following the consolidation of the last 12 months.
However, the run-up in Airtel will be gradual, says Executive Vice President and Head of Research at Kotak with more 24 years of experience in equity & derivatives research.
Do you expect the Nifty at record high in December?
The market is finding it a bit rough mainly because of two reasons. The first reason is that at 18,300 levels the markets are trading with expensive valuations. The second is that the results season for Q2FY23 is over and most companies have reported numbers below street expectations. It will revise earnings marginally downward for FY23, and FY24 and roll forward to FY25.
However, based on positive cues from US markets that hyperinflation is starting to cool down from highs, and the dollar index is coming down from highs, which will help emerging markets to attract foreign inflows to equity markets. Nifty will cross the record high, but to sustain above the same, markets will need a positive news flow which will improve the macro fundamentals of Indian markets and thereby earnings of multiples.
The PSU banking space has seen a great run since June lows. Do you see the uptrend continuing in the space?
Yes. After a long time, we saw an uptick in the credit offtake. From a 12 months perspective, the entire space should do well. We like SBI, Canara Bank and Bank of Baroda.
Do you think the worst for rupee against US dollar is behind us?
It seems so. Over the past few months, there was a sharp rise in the dollar index, which added to the pressure on the Indian rupee to further depreciate to extreme levels. However, after the recent weakness in the dollar index, we are expecting the Indian rupee to move higher to 79.00/79.50.
Do you expect Bharti Airtel to surpass Rs 1,000 mark by December-end as it has been making higher high higher low formation since July?
Technically, we think it should be as it has broken out of the trading range following the consolidation of the last 12 months. However, the run-up will be gradual.
Do you see any possibility of Nifty Midcap 100 index hitting 35,000 mark in current financial year?
It totally depends on the performance of Nifty50 stocks above the 18,000 level. If largecap companies fail to find major profit bookings above 18,000 or 18,500, experts will proceed to buy the stocks with a medium to long term-term view.
In that case, the midcap index is more likely to move toward the 35,000 mark.
As a trader, what are the general parameters you consider before taking a position in any stock?
Fundamentally, at the higher end, I mean at the upper end of the valuation metrics, first of all, we consider top-quality and largecap companies where growth is clearly visible.
Apart from that, we try to include those midcap or smallcap stocks in the portfolio which are available with decent valuations.
Avoid investing in companies where valuations are extremely rich. Technically, we value a series of higher tops and higher bottoms on larger time frames such as weekly or monthly.
In addition, we keep track of moving averages, which give an idea of how the mass psychology of market participants is progressing.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
