Nifty at 18,000 by year-end? Analysts expect 'mega rally' to continue
Premium- Nifty and Sensex hit new highs after shattering many records on Tuesday
Yes Securities has reiterated its Nifty year-end target at 18,000. Indian stock markets extended Tuesday's mammoth gains to again hit record highs today, led by banking and metals sectors. The Nifty 50 index climbed 0.9% to 16,274 while Sensex was firm above 54,300.
“We reiterate our Nifty target of 18,000 by December 2021. Corporate balance sheets have been significantly strengthened with record equity raise in FY21. On the revenue front, the listed universe is on firm ground with accelerated trend of unorganized to organized, digital super-cycle and sustained cost management," said Amar Ambani, Senior President & Research Head at Yes Securities.
"We expect the government to continue spending on infrastructure and fast track the reform agenda as we have seen with lowered corporate tax rates, PLI schemes, RBI support, strategic divestments and so on. With accommodative financial conditions worldwide, we see the mega rally in risk assets to continue," he added.
Another brokerage has a year-end target of 17,400 for Nifty. "We maintain our Dec’21 NIFTY target of 17400 (22x FY23E earning). Overall, we remain constructive on the market and believe that the dips should be utilized to build positions," the brokerage said in a recent report.
The Nifty bank index was today up around 2%. Among financials, HDFC, HDFC Bank, ICICI Bank, Kotak Bank and IndusInd Bank were between 2% and 4%.
The monetary policy committee of RBI today begins its three-day policy meeting, where it is expected to leave interest rates at record lows for a seventh straight time on Friday.
With Nifty breaking out of the 15,000-15950 range after many months of consolidation, many analysts see the possibility of more gains in near term.
"Nifty is well on its path to see the 16350 objective, which we had lined up for the last three days. Yesterday’s rise in VIX by 7.36% is counter-intuitive though, which prompts us to be cautious once in the 16200-250 vicinity. However, unless a pullback below 16090 or 16030 is seen, Favoured view expects upsides to continue aiming 16350 and well beyond," said Anand James, Chief Market Strategist at Geojit Financial Services.
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