BSE Sensex and NSE Nifty 50 are poised to hit fresh lifetime highs by the end of the current year, as global liquidity will drive investors to earn more via equity allocations, says Sanjiv Bhasin, Director at IIFL Securities Ltd. In an interview with Surbhi Jain of Financial Express Online, Bhasin believes that Sensex may reach a new high of 42,500 and Nifty of 12,500 by December 2020. He also advises that even as auto stocks surged due to pick up in demand following unlock phases in the country, investors should consider systematic investment plans (SIP) in select automobile stocks. Along with the second wave of COVID-19 pandemic, he has chalked a few risks which may dent investor sentiment going forward.
How have been April-June quarter earnings, as so far around 1,000 listed companies have announced results?
Better than expected with outperformance from certain sectors, markets are pricing in faster recovery than earlier anticipated as rural incomes, incentives & consumer discretionary spends have been the driving force along with the IT sector benefiting from work from home.
Amid volatility in Indian share market, what is your near to medium-term outlook? Where do you see BSE Sensex and Nifty 50 by year-end?
New highs are on the cards as global liquidity drives investors to earn more through equity allocations as debt yields hit 5-year lows. Sensex may touch 42,500 and Nifty 50 may hit 12,500 levels.
As the surge in auto stocks suggests a pick up in demand, do you think it’s time to buy auto stocks?
We were contrarian buyers three months back as we expected tractor and two-wheeler sales to boost auto, now we have to be positive as shared mobility taking a back seat along with public transport which augurs well for passenger vehicles also. The run-up has been substantial, but we recommend a SIP in Hero MotoCorp, M&M, Maruti Suzuki and Ashok Leyland.
Is it the right time for the investors to enter the share market or they have missed the bus? What would you advise investors who are planning fresh investments?
Well depending on your outlook, the risk/reward for near term gains may not be there. However, given the wall of liquidity printed by central banks, we expect India to outperform in the next two years. So, in all asset classes, equity offers the best two-year returns and we recommend a definite 50 per cent exposure to equity with a three-year view.
Seeing the current scenario, which sectors do you think look attractive to make investments? What are your preferred stocks?
Sectors such as Auto, IT, pharma and consumer electricals look attractive currently. Stock picks are TCS, Sun Pharma, Bharti Airtel, DLF and Havells India.
Going ahead, what are the key risks and triggers that may hurt the investor sentiment?
The key risks ahead are the rise in yields as central banks end money printing and rates rise. Also, the second wave of a pandemic could see any further lockdown which could be another headwind.
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