Expert view: Nifty may touch 27,000 by the year end or early next year, says Rohit Srivastava of Indiacharts

Expert view: Rohit Srivastava, the founder and market strategist at Indiacharts.com, believes the Nifty 50 may touch 27,000 by the year end or early next year. In an interview with Mint, Srivastava emphasised investors should continue to buy the dips and accumulate growth stocks because individual stocks have outperformed the market, and accumulation is going on in all counters. Edited excerpts:

What is your view on the Indian stock market for the medium term, considering geopolitical uncertainties and macroeconomic challenges?

The Indian stock market is facing short term challenges from the geopolitical risks that are heating up but all the other macro risks have receded thanks to government action. This should be the last stage of escalation since both parties and the rest of the world are pushing for peace. Having said that, till things are resolved the market could remain depressed.

The Nifty is about 9% down from its all-time high. What are the odds for it to hit a fresh high this year? Could it rise to the range of 26,500-27,000 by the end of December?

The market is also up 6.6% from the April bottom of 22,542. So the market is in between the highs and lows for the year and the ultimate direction will depend on the sum of events.

So far government measures and animal spirits have been positive bringing down bond yields and resulting in a higher growth in credit off take from banks. All good tailwinds to a growth cycle building below the surface.

So, as the negative sentiment from the war finally abates the market is already setup to take off to new all time highs and maybe touch 27,000 by the year end or early next calendar year.

Is this the time to invest, or should we wait for further correction?

Investors should continue to buy the dips and accumulate growth stories because even as the Nifty has been range-bound, individual stocks have outperformed the market, and accumulation is going on in all counters. The breadth has been strong.

This is the reason why the small-cap index is only 2.5% below the January top made in markets and the Midcap index is 3% above the January high, showing significant outperformance.

What sectors could lead the next wave of a rally?

Energy, metals, real estate and banking could end up being the top performing sectors in the market as things pick up. Most of these are interest rate sensitive sectors except for energy which is in the midst of structural demand pick up.

If the agro commodities cycle picks up then sugar stocks will also be a very interesting play on the market from a bottom up perspective.

Given the early Q1 trends, do you think IT could be a contra bet at this point?

I would avoid IT stocks as they have broken many short term and long term levels. There is no clear sign of a longer term or even medium term trend reversal.

Short term rallies maybe seen from time to time but will get sold into eventually so it is not worth the risk.

Valuations could continue to dive though dividend yields do make them appear atractive and can limit the downside. A strong recovery is ruled out.

Where do you see the rupee by the end of the year if crude oil stays near $80 per barrel? Can a prolonged US-Iran conflict push the currency to 100 per dollar?

This is tricky because we are all guessing on how long the conflict will last. My view is that it will end sooner than later and the rupee will stabilise and go back below 90. But as long as the conflict is on the risk is that we get back to test higher levels.

I do not expect the recent highs near 97 to be crossed right now but it is a risk. The government is actively taking steps to keep the rupee under control and therefore there is hope that they will contain this crisis.

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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.