Stock Market Outlook: Amid all the global positivity, US data points are very strong, Europe and Japan are there too and this has led Indian stock markets to overshoot slightly and there would be no surprise if a correction of 5-10 per cent comes, Rahul Arora, CEO at Nirmal Bang Institutional Equities said in a chat with Zee Business Managing Editor Anil Singhvi. The market is ahead of where it should be now, Arora said and added that investors have to be very careful. The positive US data points include jobless claims, housing data and sentiment indicators all of which are looking much better now.
Data points emerging here in India now look okay, though they could be better, Arora said. India’s forex reserves are healthy and crude prices have become benign. The expert opinions suggest that normalcy has come back by 50-70 per cent, he added.
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Nifty has seen a whopping 40 per cent rally in recent times from 7500 levels. With this as background, he said that a correction is not too far, and the markets may see it soon.
While it is still unknown what the Prime Minister Narendra Modi will say in his address to the nation, it is important to remain cautious, the CEO said. There is an extra risk factor in the markets because of China.
Zee Business Managing Editor who was speaking to Arora said that the investors should wait for the correction and make their positions accordingly.
Singhvi said that certain sectors were seeing good traction including the Fast Moving Consumer Goods (FMCG).
Arora expects the rural consumption to be good for the next one year as the crops season along with monsoon have been good. He expects the next season to also do well. Among his top buy, Arora recommends Hindustan Unilever. Another stock that he puts his bet on is Britannia Industries.
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On the sentiments prevailing in the global markets, Arora said that the markets are seeing a strong rally with very good data points emerging from the US. The liquidity in US markets is worth USD 3.1 trillion while those in Japan and Europe also between USD 3-4 trillion. This has helped markets rise.