Hi wealthgainer.in Readers, In a recent market analysis, Shrikant Chouhan, Head of Equity Research at Kotak Securities, focus attention on the growing influence of global macroeconomic factors and geopolitical tensions (Irasel – Lebnan tension) on Indian markets. He warns of potential time-based corrections if key resistance levels are not be greater than and advises investors to adopt a strategy of buying on market falls.
Key Insights from Shrikant Chouhan:
- Global Macros and Geopolitical Tensions: Chouhan highlighted that market movements are now primarily driven by global macroeconomic factors, with Indian markets starting to discount domestic conditions. He stresses that geopolitical developments will also play a crucial role in determining market trends. For example: In recent, Isreal-Lebnan tension, Russia-Ukraine War are the latest geopolitical tensions.
- Resistance Levels for Nifty and Sensex: According to Chouhan, markets could experience corrections if they fail to surpass these key resistance points:
- Nifty: 26,277
- Sensex: 85,978
Investor Strategy: Buy on market falls
Shrikant Chouhan advises investors to follow a strategy of buying on market falls at major support levels. This approach allows investors to take advantage of market corrections while maintaining a balanced portfolio.
- At Support Levels: Buy on market drops to capitalize on lower prices.
- At Resistance Levels: Reduce cash positions to consolidate portfolios and protect gains.
September Quarter Earnings Outlook
For the September quarter, Chouhan expects moderate growth in net profits for both the BSE 30 and Nifty 50 indices:
- BSE 30: 5.3% YoY growth, 2.7% QoQ growth
- Nifty 50: 3.7% YoY growth, 2.5% QoQ growth
He also projects a slight uptick in value growth for consumer staples, driven primarily by pricing.
RBI Policy and Future Rate Cuts
Chouhan is cautiously optimistic about the Reserve Bank of India’s (RBI) monetary policy, noting that inflation is expected to align with the 4% target by FY26. This could cover the way for a gradual rate-cut cycle, starting with a potential cut of 75-100 basis points by December, barring any surprises in food inflation.
Challenges in the Coming Quarter
Chouhan identifies several challenges that could impact Indian markets in the near future, including:
- 10-year US bond yield trends
- The US rate-cut cycle
- China’s stimulus package
- Rising crude prices amid geopolitical tensions
Year-End Nifty Target
He expects the Nifty to trade within a range of 23,000 to 27,000 by the end of the year, reflecting the potential for both corrections and rallies depending on external factors.
Advice for New Investors
For those new to investing, Chouhan offers the following advice:
- Long-Term Perspective: Invest with a horizon of more than two years.
- Systematic Investment Plans (SIP): Gradual investments through SIPs can help mitigate market volatility and build wealth over time.
Conclusion
In conclusion, Shrikant Chouhan warns of possible market corrections but suggests a strategy of buying on market falls to take advantage of lower prices. By following his advice, investors can navigate uncertain market conditions while positioning themselves for long-term gains.
Disclaimer: The views and recommendations mentioned above are those of the individual analyst and not of this blog. Please consult with certified financial experts before making any investment decisions.
Information Source – Mint.com