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Buy Reliance Industries stock: RIL share may soar above Rs 2600; charts signal technical pullback in near-term

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Reliance Industries share price is likely to gain 9 per cent to Rs 2,615 apiece in near-term, as the stock has been witnessing buying demand from the key support area of Rs 2300-2370 for the third time since May 2022, analysts at ICICI direct Research said. It expects the RIL stock to witness a gradual pullback from the current oversold territory, thus offering a fresh entry opportunity with a favourable risk-reward set up. On Wednesday, RIL shares were trading 1.7 per cent down at Rs 2,354.05 apiece on BSE.  The stock is down nearly 18 per cent from the all-time highs, hit in April this year.

Also read: RBI MPC likely to hike repo rate by 50 bps again; commentary on liquidity, rupee depreciation keenly eyed

Reliance Retail has been one of the fastest and largest growing retailers over the recent time. During FY18-22 the company has recorded a staggering revenue CAGR of 30% with sales worth nearly Rs 2 lakh crore in FY22. On Tuesday, Mukesh Ambani’s Reliance Retail announced the opening of its fashion & lifestyle departmental store, Reliance Centro. This is the first such outlet by Mukesh Ambani’s Reliance Industries conglomerate, and is located in Vasant Kunj, New Delhi. The departmental store by Reliance will compete against the likes of Shoppers Stop, Lifestyle International, and other fashion & lifestyle departmental stores. 

Also read: Retail cos leveraging AI to grow revenue, shifting focus to customer experience, front-end | Nasscom Interview

Analysts noted that the long-term prospects and dominant standing of Reliance Industries in each of its product and service portfolio provide comfort for long term value creation. “RIL’s consumer business will be the growth driver, going ahead. The company has a strong balance sheet while its traditional business will continue to generate steady cash flows,” it added.

The stock recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.

Sensex, Nifty fall for 2nd straight day on weekly F&O expiry; Bank Nifty looks bullish, use buy on dips

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Domestic equity market benchmarks BSE Sensex and NSE Nifty 50 ended in the red for the second straight day on Thursday, a day of weekly F&O expiry. BSE Sensex fell 412 points or 0.7 per cent to end at 59,934, while NSE Nifty 50 slipped 126 points or 0.7 per cent to finish trade at 17,877.40. Index heavyweights such as Infosys, Reliance Industries Ltd (RIL), Axis Bank, HDFC Bank, and Kotak Mahindra Bank, among others contributed the most to the indices loss. Broader markets outperformed equity frontliners. S&P BSE MidCap index gained 82 points to end at 26,307, while S&P BSE Smallcap index was up 19 points to settle at 29,911.

Also read: Tata’s 5-year plan to make Air India great again: 30% market share, ‘fixing the basics’, other key focus areas

The Bank Nifty index witnessed some profit booking at higher levels which indicates 41,800-42,000 will act as an immediate hurdle on the upside. The lower-end support stands at 40,000 levels where one of the highest open interests is built up on the put side. The undertone remains bullish and once should keep a buy-on-dip approach as long as it holds the support of 40,000 on the downside.

Deepak Jasani, Head of Retail Research, HDFC Securities

Nifty corrected once again from above 18000 level and underperformed the other markets for a change. Broad markets continues to lag while largecaps seemed to be under mild selling pressure. 18096-17771 could be the band for the Nifty in the near term.

Also read: WPI inflation may ease off to single digit by Oct; RBI MPC may hike repo rate by 50 bps in Sep

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

We saw markets rallying sharply over the past week, so profit-taking was on expected lines. Volatility would continue due to concerns of a hawkish stance on rate hikes from the central banks amid rising inflation. In an uncertain market, stock & sector-specific buying activity could gain momentum. Nifty has formed a bearish candle on daily charts and a double top formation on intraday charts indicating continuation of weakness in the near future. The trading set up suggests that a fresh round of selling is possible only after the dismissal of the 17800 support level. If the index trades above 17800 then it could retest the level of 18100- 18150. On the flip side, below 17800, a quick intraday correction is not ruled out. Below which, it could slip till 17700-17650.

Vinod Nair, Head of Research, Geojit Financial Services

Defying the positive trend of global markets, domestic indices shed its early gains, dragged by losses in IT and pharma sectors, while mid & small caps outperformed. Fears of a recession in the global economy exacerbated selling pressure in IT and pharma stocks. Mid & small caps are expected to continue their trend in the short to medium term as they are trading reasonably well compared to large caps and at a discount to their historic valuation. Globally, in light of the elevated inflation in the US, investors are on an edge, assessing the possibility of a higher magnitude of a rate hike in the next Fed policy meeting.

Will bears drag Nifty below 18000 or bulls continue momentum? 5 things to know before market opening bell

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Indian equity markets are likely to open lower on Wednesday, hinted SGX Nifty. Nifty futures traded 298 points, or 1.65% lower at 17,794 on the Singapore Exchange, signaling that BSE Sensex, NSE Nifty 50 were headed for a gap-down start. “The current market buoyancy globally, including in India, is based on the expectation that inflation has peaked along with softening crude prices. We believe that, to an extent, the expectation of inflation peaking is right, but one will have to keep an eye on energy prices in Europe & US with the onset of winter, which can re-ignite the inflation fire. The current momentum in the equity markets can sustain, but we would advise investors to raise some cash at the current levels, which can be deployed if the markets correct on either rate hikes or energy prices moving up again,” said Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS.

Also Read: JSW Steel, Infosys, Vedanta, Jet Airways, Future Lifestyle, Bharat Forge, KEC International stocks in focus

Nifty technical view: “A small positive candle was formed on the daily chart with minor upper and lower shadow and with opening upside gap. Technically, this market action signal a formation of spinning top type of candle pattern at the highs. Normally, a spinning top formation after a reasonable upmove or at the hurdle could be considered as a reversal pattern post confirmation. Hence, any weakness from here or from highs could confirm top reversal pattern. However, a sustainable move above this patterns high at 18088 levels is likely to negate the bearish implication. The short term trend of Nifty continues to be positive amidst a range movement,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: The Nifty is trading with higher high & higher low formations from the last 5 trading sessions on daily charts suggesting strength in the counter. “The support for Nifty has shifted around 17900 levels while on the upside, 18180 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 40000 levels while resistance at 41400 levels. Overall, till the time nifty holds the 18000 level, it’s looking strong on charts crossing above 18180 marks will open the gate for 18400-18500 levels. FMCG stocks look positive on charts; one can accumulate on dips,” said Palak Kothari, Senior Technical Analyst, Choice Broking

IPO watch: Harsha Engineers International garnered Rs 225.7 crore from anchor investors ahead of its IPO that opens for public subscription today, The company informed the bourses that it allocated 68,40,855 shares at Rs. 330 per share on Tuesday to anchor investors. American Funds Insurance Series Global Small Capitalization Fund, Goldman Sachs Funds – Goldman Sachs India Equity Portfolio, PineBridge Global Funds – PineBridge India Equity Fund, Abu Dhabi Investment Authority-Monsoon are among the investors that participated in the anchor book.

Also Read: Sensex, Nifty end at 5-month high, Nifty support at 18000, what do charts say? Investors eye US inflation data

Stocks under F&O ban on NSE: Indiabulls Housing Finance, Ambuja Cements, and Delta Corp remain the three stocks under the NSE F&O ban list for September 14. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 percent of the market-wide position limit.

Buy these two stocks for near term gains as Nifty’s intermediate uptrend remains intact

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While the Nifty has corrected from the high of 15,044, the index continues to hold above a rising trend line that has held the important lows of the last few months. This implies that the index remains in an intermediate uptrend. With the strong bounce-back seen on Wednesday, traders will need to watch if the Nifty can now hold above the crucial supports of 14,506-14,461 in the very near term. Further upsides are likely once the immediate resistances of 14,723 are taken out.

Stock picks

Buy Torrent Pharmaceuticals

On Wednesday, the stock moved up smartly and in the process took out its recent highs on the back of above-average volumes. This augurs well for the uptrend to continue.

Technical indicators too are giving positive signals as the stock trades above the 50 day SMA and short term momentum indicators like the 14-day RSI too have bounced back from lower levels and are now in rising mode and not overbought.

With the intermediate and long term technical setups looking positive, we believe the stock has the potential to move higher in the coming weeks and therefore recommend a buy between the Rs 2600-2640 levels. CMP is Rs 2627.35. Stop-loss is at Rs 2500 while targets are at Rs 2890.

Buy Shipping Corporation of India

SCI has recently corrected from a high of Rs 134.65 tested in early March 2021. The stock found support at the Rs 97 levels before bouncing back in the last two weeks and consolidating in a range.

On Wednesday, the stock broke out of a narrow range on the back of above-average volumes. This augurs well for the uptrend to continue.

Technical indicators are giving positive signals as the stock trades above the 20-day SMA. Short term momentum readings like the 14-day RSI too are in rising mode and not overbought.

With the short term and intermediate technical setups looking attractive, we expect the stock to gradually move higher in the coming weeks. We, therefore, recommend a Buy between the Rs 114-118 levels. CMP is Rs 116.8. Stop-loss is at Rs 108 while targets are at Rs 138.

(Subash Gangadharan is a Senior Technical and Derivative Analyst at HDFC Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)

Gold Price Today, 8 Sep 2022: MCX gold may trade at Rs 50100-50750; all eyes on ECB monetary policy

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices in India were trading muted on Thursday, even as yellow metal inched higher in global markets. On Multi Commodity Exchange, gold October futures were trading Rs 16 down at Rs 50,490 per 10 grams. Silver prices were up Rs 343 or 0.6 per cent to Rs 54,370 per kg. Globally, yellow metal prices inched higher as a slight pullback in U.S. bond yields and bargain-hunting underpinned the market, although a stronger dollar and aggressive interest rate hike fears limited gains, according to Reuters. Spot gold edged up 0.1% to $1,702.59 per ounce, having dropped to its lowest since Sept. 1 at $1,690.10. U.S. gold futures were little changed at $1,713.30.

Also read: FM Sitharaman’s fight against inflation: Centre, state govts collectively responsible to tame rising prices

Gold gains ahead of the ECB meeting today where a 75bps rate hike is expected. Dollar index rally was overstretched and yesterday we saw some pullback in the safe haven currency and US 10 yr Treasury yield. This helped in all asset classes gaining some momentum on the upside including gold. The rally in gold might be short lived as the majority of the rally was because of weakness in USD and there weren’t many long positions that got added in open interest. With Sept 20-21 rate hike from Fed near the corner, USD is expected to remain strong making gold vulnerable at the top. Today’s rally is expected to extend as EUR is expected to gain after rate hike from ECB. Resistance in MCX is at 50700 while support is at 50150.

Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Gold and silver bounced helped by the dollar’s slight retreat from a two-decade high and as bargain hunters took advantage of recent losses. The Dollar Index continued to hover around its two decade high although, slight pullback from the peak late in the session seemed to offer some respite for gold and silver prices. The U.S. services industry picked up last month, providing ammunition to the U.S. Federal Reserve to deliver another 75-basis-point rate hike capping gains for gold on the higher side. Comments from the Fed Vice chair showed inflation and growth concerns in the speech. Fed Vice Chair Lael Brainard reaffirmed that Fed would take necessary action to calm Inflationary pressure, while also noting the risks of going too far,  Fed should be careful to avoid overtightening. Apart from U.S. initial weekly jobless claims, focus will be on ECB policy meeting and Governor Powell’s speech later in the day. Broader trend on COMEX could be in the range of $1680-1735 and on domestic front prices could hover in the range of Rs 50,100-50,750.

Also read: Indian economy to be hit by global growth slowdown; govt likely to meet annual fiscal deficit target

Pritam Patnaik, Head – Commodities, HNI & NRI Acquisitions, Axis Securities

Gold prices got some much-needed respite as the dollar index lost some of its steam. The USD came off its 20-year highs as the markets prepare to take in ECB’s rate hike decision. The central bank is expected to turn interest rates positive for the first time in 11 years with a 50-basis point hike, as it struggles to combat runaway inflation. Expectations of higher rates from the ECB have bolstered the Euro against the USD, leading to a small relief rally in gold. The sustainability of the same is limited, as the impending Fed rate decision is bound to come back to focus. The market expects gold to trade in a range between $1730 to $1680. A sustained move above or below this range could signal a more definitive trend. Sell on the rise is the recommended strategy.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Nifty 50 rejig: Adani Enterprises replaces Shree Cement; IRCTC, Adani Total Gas, HAL enter Nifty Next 50

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Gautam Adani-led Adani Enterprises will become part of Nifty 50 from Friday, 30 September, in NSE’s upcoming semi-annual index rejig. Adani Enterprises will replace Shree Cement from the 50-stock index. This is the second Adani stock to be included in the Nifty 50 index after Adani Ports and Special Economic Zone. Apart from Nifty 50, changes have been announced in Nifty Next 50, and Nifty IT. Adani group has seven established listed entities, including Adani Green Energy, Adani Power, Adani Total Gas, Adani Transmission, Adani Ports and Special Economic Zone, Adani Wilmar, and Adani Enterprises.

Also read: Rupee hits new lifetime low, nears 82 mark on strong dollar, weak markets; USDINR support at 81

In the last 6 months, Adani Enterprises’ share price is up 86.5 per cent, on the other hand, Shree Cements stock is down 10 per cent and is trading at a price of Rs 20,963.5 per share. “We at Edelweiss Alternative & Quantitative Research have analysed the flow impact led by rebalance and recapping of stocks in key indices (Nifty 50 , Nifty Bank and CPSE Index) and inclusion/exclusion in Nifty Next 50 and Nifty IT,” the report said. 

Also read: Reliance, HCL Tech, Dish TV, Torrent Pharma, Birla Corporation, IDBI Bank, Adani Group stocks in focus

IRCTC, Adani Total Gas, others enter Nifty Next 50

Nifty Next 50 index will see the entry of marquee names such as Bharat Electronics, Shree Cements, Adani Total Gas, Hindustan Aeronautics (HAL), IRCTC, Mphasis, and Motherson Sumi Wiring India. Moving out of the junior Nifty index will be Adani Enterprises, Dominos operator Jubilant FoodWorks, MindTree, Lupin, Punjab National Bank (PNB), SAIL, and Zydus Lifesciences.

Persistent Systems replaces Mindtree in Nifty IT

For the Nifty IT index, Edelweiss noted that Persistent Systems’ stock will enter the index replacing Mindtree. Inflows towards Persistent Systems (PSYS) will be around $16 million, and outflows from Mindtree would be around $23 million. However, no changes to the Nifty Bank index and Nifty CPSE have been made.

Re hits record low on hawkish Fed stance

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The rupee on Thursday slipped to record lows against the dollar, after the US Federal Reserve raised benchmark rates by 75 basis points and sounded more hawkish than anticipated. The rupee plunged nearly 90 paise, closing the session at 80.87 compared with 79.98 on Wednesday, the single-biggest drop for the Indian currency since February 24. Apart from the prospect of more rate hikes, the escalating geopolitical risks also weighed on the sentiment.

Meanwhile, bonds sold off, sending the yield on the benchmark bond to 7.312%, up 8 basis points from its previous close of 7.234%. These levels were last seen on August 8.

Also Read: Olectra Greentech sees major FPI participation in its Rs 800-crore fund-raising plan

Jayesh Mehta, country treasurer, Bank of America, said that while the uncertainty in global markets and the consequent volatility could keep the rupee above 80 levels, closer to March it was likely to settle down at below 80 levels. It was not immediately clear whether RBI had intervened in the currency markets.

Most Asian currencies also depreciated against the greenback.

The dollex was trading at 110.65 on Thursday evening (IST) after having gone up to 111 levels in earlier trades. According to Reuters, the gauge had hit a fresh 20-year high of 111.80 at one point but came off when the Japanese yen appreciated after authorities intervened in the foreign exchange market for the first time since 1998. Currency experts do not rule out more strength for the gauge in the coming months.

While the 75 bps hike in the Fed funds rate was in line with expectations, the hawkish commentary came as a surprise. The Fed’s dot plot indicates rates will reach 4.4% by the end of this year, implying a cumulative increase of 125 basis points over the remaining two meetings in November and December. Economists expect rates could move up to 4.6% by end-2023.

Gold Price Today, 15 Sep 2022: MCX gold looks vulnerable till 49500, sell on rise; check support, resistance

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices were trading weak in India on Thursday, on the back of weak global cues. On Multi commodity Exchange, gold October futures were ruling Rs 195 or 0.4 per cent down at Rs 49,823 per 10 gram, as against the previous close of Rs 50,018. Silver December futures were trading Rs 113 or 0.2 per cent down at Rs 56,873 per kg. Globally, yellow metal  prices inched lower as a firmer dollar and expectations of big interest rate hikes from the U.S. Federal Reserve diminished the metal’s appeal, according to Reuters. Spot gold fell 0.1% to $1,693.81 per ounce, while U.S. gold futures were down 0.3% at $1,704.4. The dollar index edged 0.1% higher towards recent peaks, making gold expensive for buyers holding other currencies.

Also read: Bank Nifty support at 40000, Nifty to trade flat on today’s expiry; use Call Ladder for 22 Sep F&O expiry

COMEX gold trades modestly lower amid stable US dollar and higher bond yields as US inflation data did little to deter market expectations that the Fed may continue with aggressive rate hikes. Also weighing on gold price is continuing ETF outflows which shows lack of investor interest. Gold has corrected after failing to break past the $1750/oz level and may remain under pressure as market players position for the Fed meeting next week however we need to see if it manages to hold near the $1700/oz level.

Bhavik Patel, Commodity & Currency analyst, Tradebulls Securities

Gold is under $1700 despite US PPI meeting market expectation. The follow up selling continues after yesterday’s fall when the market was caught wrong footed after US inflation data came higher than expected. $1690-$1685 is the zone where typically buyers emerge and if gold fails to hold this level, then expect prices to test $1675-$1650. In MCX, price has already breached its recent swing low of 49876 and is looking vulnerable till 49500. So sell on rise should be the theme today for intraday with stoploss of 50400 and expected target of 49500.

Also read: Fitch cuts India’s FY23 GDP growth forecast to 7%; high inflation, policy tightening dampen economic prospects

Tapan Patel, Senior Analyst — Commodities, HDFC Securities

Gold prices traded weak on Thursday with COMEX Spot gold prices were trading near $1691 per ounce in the morning trade. MCX Gold October futures opened lower in line with weak global cues, were trading 0.37% down near Rs. 49837 per 10 gram. The yellow metal fell below $1700 on growing optimism over aggressive rate hike from US FED with surge in inflation numbers. We expect gold prices to trade sideways to down for the day with COMEX Spot gold support at $1676 and resistance at $1710 per ounce. MCX Gold October support lies at Rs. 49600 and resistance at Rs. 50100 per 10 gram.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Gohad Madhya Pradesh Assembly Constituency Election 2023: Date of Result, Voting, Counting; Candidates

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As anticipation mounts for the upcoming Gohad Constituency Election in Madhya Pradesh, voters are eagerly awaiting the big battle that kicks off with the announcement of key dates by the Election Commission of India. Here, we provide you with essential details about the Gohad Constituency Assembly Election 2023 that every voter should be aware of.

Gohad Constituency Madhya Pradesh Assembly Election 2023: Voting Date

The voting date for the Gohad Assembly Constituency Election 2023 has been officially announced by the Election Commission. As per the ECI, Gohad Assembly Constituency will go to polls on November 17. Stay tuned for updates as we bring you the latest information.

Gohad Madhya Pradesh Election 2023: Candidates

Watch this space as prominent political parties, including the Indian National Congress (INC)Bharatiya Janata Party (BJP)and Bahujan Samaj Party(BSP) along with others, are poised to reveal their candidates for the Gohad Assembly Constituency Election 2023 post the official declaration of voting dates by the Election Commission of India.

Stay informed as we bring you the latest updates on the Gohad Assembly Constituency Election 2023, keeping you abreast of all the developments and insights that matter to you.

Gohad Constituency MP Election Result: What happened in 2018

Ranvir Jatav from Gohad of Madhya Pradesh, won the seat with 62981 votes. He defeated Bharatiya Janata Party’ Lalsingh Arya who had polled 38992 votes. The winning margin was 23989 votes.

2018 Gohad Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesRanvir JatavIndian National Congress62981

Candidate List Party Name Votes Gained (Vote %) Ranvir Jatav Indian National Congress 62981 (48.58%) Lalsingh Arya Bharatiya Janata Party 38992 (30.07%) Dr Jagdish Singh Sagar Bahujan Samaj Party 15477 (11.94%) Gulab Singh Jatav Bahujan Sangharshh Dal 4386 (3.38%) Prem Narayan Mahore Communist Party Of India (marxist) 1734 (1.34%) Guddu Valmik Aam Aadmi Party 1173 (0.9%) None Of The Above None Of The Above 982 (0.76%) Dr P S Bouddh Independent 694 (0.54%) Rakesh Sagar Rashtriya Lok Samta Party 685 (0.53%) Ramlakhan Independent 657 (0.51%) Moharsingh Independent 566 (0.44%) Thakurdas Khatik Rashtriya Sanyukt Samaj Party 312 (0.24%) Vidhyaram Independent 291 (0.22%) Rajneesh Pawaiya Bahujan Mukti Party 265 (0.2%) Jitendra ( Banti Khatik) Samajwadi Party 233 (0.18%) Mahendra Jan Adhikar Party 228 (0.18%)

Gohad Constituency MP Election Result: What happened in 2013

In the Madhya Pradesh Assembly election of 2013, Lal Singh Arya won from the Gohad seat garnering 51711 votes and defeated Indian National Congress candidate Mevaram Jatav who bagged 31897 votes. The candidate who came third was S D Bahujan Sangharshh Dal’ Phool Singh Baraiya.

Lal Singh Arya got 51711 votes while Mevaram Jatav got 31897 votes.

2013 Gohad Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesLal Singh AryaBharatiya Janata Party51711

Candidate List Party Name Votes Gained (Vote %) Lal Singh Arya Bharatiya Janata Party 51711 (45.65%) Mevaram Jatav Indian National Congress 31897 (28.16%) Phool Singh Baraiya S D Bahujan Sangharshh Dal 14633 (12.92%) Krishnagopal Chaurasiya(jatav) Bahujan Samaj Party 5890 (5.2%) Premnarayan Mahor Communist Party Of India (marxist) 4748 (4.19%) Prem Shankar Parihar(mirdha Khengar) Independent 695 (0.61%) None Of The Above None Of The Above 647 (0.57%) Rakesh Sagar Samajwadi Party 500 (0.44%) Omprakash Rajauriya Nationalist Congress Party 496 (0.44%) Devendra Singh Independent 339 (0.3%) Purushottam Independent 322 (0.28%) Manoj Kumar Indian Justice Party 314 (0.28%) Lal Singh Independent 308 (0.27%) Mohar Singh Independent 287 (0.25%) Jitendra Urf Vanti Khatik Independent 257 (0.23%) Jitendra Singh Independent 221 (0.2%)

Gohad Constituency MP Election Result: What happened in 2008

Makhan Lal Jatav of the INC was the winning candidate from the Gohad constituency in the MP Assembly elections 2008, securing 27751 votes while 26198 votes were polled in favour of Lal Singh Arya of the BJP. The margin of victory was 1553 votes.

2008 Gohad Assembly Constituency Election Result

Winning Candidate NameParty NameTotal VotesMakhan Lal JatavINC27751

Candidate List Party Name Votes Gained (Vote %) Makhan Lal Jatav INC 27751 (30.37%) Lal Singh Arya BJP 26198 (28.67%) Mevaram Jatav BSP 18603 (20.36%) Prem Narayan Mahaur CPM 7541 (8.25%) Chaturilal Barahdiya LJP 6429 (7.04%) Oumprakash Baba SP 866 (0.95%) Ashok Dandotiya IND 704 (0.77%) Sanju Jatav IND 657 (0.72%) Makrand Jatav BJSH 481 (0.53%) Rakesh Babu Goyal BHBP 423 (0.46%) Sitaram Jatav IND 406 (0.44%) Naryan Bharti IND 371 (0.41%) Narendra Singh IND 320 (0.35%) Suresh Kumar IND 320 (0.35%) Jasawant IND 293 (0.32%)

Low interest rates to keep markets flushed with liquidity; here’s what else is in store for 2021

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By: Nikhil Kamath

As the rollercoaster of a year – 2020 – comes to an end, we see ourselves at the peak of a bull market which nobody could have seen coming especially during the March lows. This sheer unpredictability of the capital markets makes it difficult for one to predict what lies ahead but subtle cues for sectors/themes that are poised to excel are there to be seen.

Once the effects of the pandemic were normalised, businesses with greater capital reserves have been able to return to normalcy a lot faster than others but everyone barring a few sectors are on the path to recovery. Some sectors like aviation, hospitality continue to see pain through no fault of their own but sectors like real estate, agriculture which were otherwise dormant segments of the economy are showing signs of resurrection. This structural shift in the economic engine will give investors new avenues to invest.

Looking ahead, low-interest rates which propagate liquidity and high inflation will continue to force money into capital markets. FII inflows, which hit an all-time high in November, will continue to pour into the markets due to the weakness in the dollar as seen in the dollar-cost index. 

At the ground level, consumer-facing sectors, especially discretionary goods and services will continue to be subdued as consumers focus on shoring up their disposable income due to the uncertainty around the short-term effect of COVID and the vaccine. Policymakers have focused on providing funding to targeted sectors which have the ability to spur demand for goods and employment across multiple sectors.

I think the coming year will be less volatile than the last. The pandemic brought with it incredible amounts of uncertainty around which sectors will live through the economic downturn. Markets often overestimate a problem, to begin with, and course-correct with a vengeance.

I believe the Indian Economy possesses immense amounts of growth potential and at the current juncture, finding value in sectors/companies is what one must focus on. It will be prudent at this juncture to focus on inherent fundamentals and ignore most of the noise.

(Nikhil Kamath is the Co-founder and CIO, True Beacon and Zerodha. The views expressed by the author are his own. Please consult your investment advisor before investing.)