Home / Markets / Stock Markets /  IIFL's Sanjiv Bhasin: Expect December second half to be positive for stocks
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Indian markets were sharply higher in noon trade today as the Reserve Bank of India left its key interest rates unchanged as expected, and promised adequate policy support to help sustain a durable economic recovery amid worries around the Omicron coronavirus variant. The BSE Sensex was up 900 points while Nifty was firm above 17,400, extending rebound from Friday's lows when the indices had dropped to three-month lows. 

Sanjiv Bhasin, Director-IIFL Securities, expects a positive second-half for Indian markets and is “looking forward to 18000 in Nifty by end December as foreign selling abates and better macro sees value buying push indices higher."

Globally, equity markets were oversold as fear of Omicorn saw equity take a hit and now fears seem to recede, he added. 

Also for Indian equities, fall in crude, local mutual fund flows being best ever and attractive valuation in banks could support the market, he added. 

Santosh Meena, Head of Research, Swastika Investmart, also expects the second half of this month to be positive for Indian equities. “We are in a bull market where we are seeing the first meaningful correction that has completed its 10% from highs of 18604 at the low of 16789. The recent low could be bottom or the correction can see further extension towards the 16700-16400 zone or even lower but this correction is a buying opportunity," he said, referring to the recent correction in markets. 

“It is difficult to say that Nifty will close above 18000 by the end of 2021 but I believe the second half of December is likely to remain positive for the market. Historically, December remains one of the best months where Nifty has witnessed an average 3% gain for the last 10 years," he added. 

The Nifty 50 and the Sensex both have shed about 4% since the RBI's last meeting in October, weighed down by fears over high valuation and as investors waited for more clarity on just how much economic disruption Omicron might cause.

Among sectors, the Nifty IT index rose as much as 2.3% on Wednesday, led by Wipro Ltd and Infosys Ltd, up as much as 3.2% and 2.8% respectively.

"The decision to keep the rates unchanged was on the expected line. Though the economy is recovering, it is early to say that it is a broad-based recovery, which still requires support from the central Bank. The growth-inflation trade-off is getting prominent in the global economy. The rising inflation rate has forced various central banks to increase the pace of monetary policy normalization. However, there hasn't been any considerable revision on the inflation forecast by RBI and maintained it at 5.3 percent for FY22. As the favorable base effect wanes off from November'21, we could expect some upward pressure in the inflation rate in the coming months," said Deepthi Mathew, Economist at Geojit Financial Services.

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