With the Nifty crossing the psychological level of 8,000 for the first time on Monday, experts are busy charting the trajectory of the 50-share gauge and Indian equities as a whole. Industry observers see Indian equities entering the next phase of bull run, following a 25% gain in the benchmark indices — albeit with a sizable correction — citing improvement in growth prospects and favourable global factors, such as the decline in crude oil prices.
Raamdeo Agrawal, joint MD, Motilal Oswal Financial Services, expects the Nifty to touch the 10,000-mark by next Budget and continues to see the current set of stocks leading the next phase of the rally, their size or sector notwithstanding.
“The companies that have performed, whether mid cap or large cap from a particular segment, are the ones that are going to lead the pack...they are going to make a lot of money in the new environment, whether it is infrastructure, car, paint or a pharmaceuticals company. Hence, I would be surprised if the leadership changes as the market progresses from 8,000 to 10,000,” Agrawal said in a television interview.
“It is just about five months away, which is enough time for a nice 20-25% kind of run. It could be 9,000, it could be 10,000, but I am just saying it would be significantly higher from here,” Agrawal said. The Nifty took 77 days to reach 8,000 from 7,000. The fastest 1,000-point move is 24 days in September-November 2007, when the 50-share index rose to 6,000 levels, Bloomberg data show.
Maruti Suzuki topped the list of best-performing stocks during the Nifty's 1,000-point journey this summer. Maruti, the largest car-marker by volume, has gained 42% followed by Bharat Petroleum Corp (BPCL) with a 40.3% ascent. Defensives also remained the preferred pick despite hopes of turnaround in the Indian economy. Sun Pharma (37%), Cipla (36.5%) and Lupin (34.5%) featured in the list of top gainers since May.
Analysts said sentiments for automobile companies have drastically improved after the general elections, leading to higher inquiries and step-up in conversions, particularly in passenger vehicles (PVs) and medium and heavy commercial vehicles (MHCV).
“India continues to be under-penetrated in terms of passenger cars compared with the developed world and other emerging markets. With consumer sentiment expected to rebound on the back of an economic revival, passenger car demand is likely to see strong growth over the next couple of