Mkts to rally next week; Nifty to hit 4700: Experts

It was a consolidation day for the markets today. Benchmark indices snapped a two-day winning streak and ended the session marginally lower. The sell-off in oil & gas, technology, realty, cement, private power counters and in stocks like BHEL, SBI and HUL kept the Nifty below the 4650 level. On the positive side, telecom (barring Reliance Communication) and metal stocks, NTPC and HDFC Bank helped the benchmark indices.

Amitabh Chakraborty, CFA, FRM, President (equity), Religare Capital Markets Limited said he expected the midcaps to start moving again from next week onwards and that the market would move towards 4,700 Nifty or 16,000 Sensex. He added that he saw some correction in the market prior to the Budget

Rahul Mohinder of viratechindia.com said, that the short-term trend looks fairly comfortable and sees the market heading towards levels like 4,780-4,800. He recommends trading till about 4,780 on the Nifty.

On the valuation front Chakraborty said, “If you see price to book ratio or if you see return on capital basis or dividend yield over US treasury, emerging markets actually look quite decently valued at this point of time. That means there is upside according to me in the emerging markets space from a global fund managers’ perspective.”

What after the Budget?

Chakraborty said he expected a fall post-Budget as they don’t expect the Budget to achieve all the expectation. “The Budget would be quite populist in nature and there is a possibility that prior Budget probably we will be seeing that fall.” He added, “Individual stocks will be moving up and next week can be quite exciting on the individual stocks and many stocks are actually available today at quite decent valuation and one can get into those stocks.”