Jan. 01--How do you see the performance of Sensex and Nifty in 2014?
Jyotivardhan Jaipuria, head, India research, Bank of America Merrill Lynch --
We see the market giving 10-12% returns for 2014. Our year-end target for the Sensex is 23,500. We see a flattish to mild recovery in the economy that will drive returns in the market. Early part of the year, market will be focused on tapering and the elections in India.
Nirmal Jain, chairman, India Infoline Ltd:
The market touched its all-time high after six years but the valuations vary widely. Leave aside the top 12-15 stocks, heavily owned by foreign institutional investors (FIIs), and the rest of the market is cheap. Things have started to look up for equities and we believe the party will continue in 2014. Inflation is likely to top out in coming months due to slowing demand and wage growth, which means that interest rate cycle will peak out post another quarter percentage hike in policy rates. If we go by the assurance given by the finance minister, the fiscal deficit target will be met. This can be another booster for the market.
Dinesh Thakkar, chairman and managing director, Angel Broking Pvt. Ltd:
Equity markets are likely to gain positively in 2014 on the back of supportive global cues as well as improving domestic economic outlook. Our external sector is more resilient now as the trade deficit has narrowed owing to the boost from export performance and moderation in import demand. I anticipate better agricultural production to result in easing of inflation and that is in turn likely to give the RBI (Reserve Bank of India) room to bring rates down. At the same time, revival in the investment cycle has the potential to boost GDP (gross domestic product) growth considerably. The Sensex is likely to scale 24,600 over the coming one year.
Shankar Sharma, vice-chairman and joint managing director, First Global Stockbroking Pvt. Ltd
Market participants are way over-extended on a vastly under-analysed and over-simplified perspective, called the (Narendra) Modi Trade. No amount of cold data or reasoning can sway these minds from considering any perspective other than a Modi sweep at the centre in 2014. This is the classical mindset of crowds at the peak or trough of markets, when the collective mind is unwilling to consider any perspective other than what they have fallen hopelessly in love with.
To me, 2014 looks to be a treacherous year for Indian equities because the majority are infatuated by a romantic notion. Markets are no place for romances.
Nilesh Shah, managing director and chief executive officer, Axis Capital Ltd:
The equity market will be volatile in 2014. It will be supported by shift occurring in favour of financial savings from physical savings. It will get supported by broad valuation which are near fair value. It will face the uncertainty of election outcome till the actual results are out. It will also look forward to revival in investments by the new government to sustain higher growth.
A large part of volatility will also come from the fact that there is very high polarization among sectors like technology, pharma, FMCG (fast moving consumer goods) on one side and capital goods, real estate, metals, auto on the other side. The markets will favour contra investment style rather than momentum style .
Motilal Oswal, chairman and managing director Motilal Oswal Financial Services Ltd:
Markets should move higher in 2014 on the back of better earnings performance of corporates, better government at Delhi, better global growth and low tail risk out of Europe
Manishi Raychaudhuri, Asia Pacific Strategist, BNP Paribas Securities India Pvt. Ltd
We believe Sensex and Nifty should generate moderate returns (10-12%) in 2014, in line with underlying earnings growth. However, that should be significantly better than returns generated in 2013, when measured in USD terms.
Which sectors could give good returns in the next year?
Jaipuria: We like autos, energy and telecom. We also like private sector banks,