INSUBCONTINENT EXCLUSIVE:
MUMBAI: Domestic stocks may continue to rally for the next couple of months, but such a surge may fizzle out sooner than one expects as
valuations would soon look very expensive from a one-year perspective, says Gautam Chhaochharia, Managing Director and Head of Research at
UBS Securities, India.
The current rally in stocks, Chhaochharia says, is being powered mainly by optimism over possible re-election of the
veteran says Dalal Street is factoring in Modi again heading a very strong government
liquidity and a low interest rate environment are also fuelling the current optimism in equity.
Yet, Chhaochharia has a December target of
That pegged Nifty PE at 28.08 against a 20-year average of 21.06.
On Friday, Fitch Ratings cut India's economic growth forecast for the
next financial year that starts on April 1 to 6.8 per cent from its previous estimate of 7 per cent, on weaker-than-expected momentum in the
still see Indian GDP growth to hold up reasonably well at 6.8 per cent, followed by 7.1 per cent in FY21," Fitch said in its Global Economic
Outlook.
Earlier, the global rating agency had cut India's FY19 GDP growth forecast to 7.2 per cent from 7.8 per cent on December
6.
According to Chhaochharia, the market is factoring in a big pickup in earnings cycle next year to year-and-a-half, which can
frustrations for India Inc and stock investors for over five years now
At the start of every year analysts make projections of a turnaround in corporate earnings only to downgrade such hopes as the year
excessive optimism over Modis return
adversely, definitely in the near to medium term
