Hyderabad: Karvy Stock Broking Limited Friday said 2019 would be a year of optimism about economy in country.The gross non-performing assets (NPA) of banks decreased from 11.5 per cent in March 2018 to 10.8 per cent in September 2018 and are expected to further decline to 10.3 per cent by March 2019, Karvy said in a press release here while quoting recent financial stability report of RBI.Gains were triggered on hopes of interest rate cut by RBI after latest data revealed that retail inflation has dropped sharply in December, release said.Positive global stocks also boosted sentiment, it said.While Indian economy remains resilient, IMF forecasts growth for FY2019-20 to be 7.4 per cent, which is a strong number, release said.The optimistic turn about equities is that growth drivers are changing from private consumption to investment in Q2 FY 2018-19, gross fixed capital formation (GFCF) increased by 12.5 per cent year on year recording third consecutive quarter of double-digit growth, it said."Given this, major event for Indian markets is general elections and 2019 may shape up to a tale of two halves, equities moving sideways ahead of elections," release said.Also, with start of 2019, equity market may lay focus on some important economic events like bank recapitalisation, populist measure if any in Interim Budget, farm loan waiver effects, GST collection trends, progress under insolvency code and interest rate trajectory, it said.Based on outcome of recent state elections and general elections due in first half of 2019, government is likely to focus more on rural and agriculture sector, release said.Creation of jobs at an accelerated pace could be one more focus area, it said.The calendar year 2018 has been a marginal year for investors with Nifty giving 3 per cent return.
And investors would do well to moderate their expectations for index returns in calendar year 2019, release quoted CEO of Karvy Stock Broking Ltd Rajiv Singh as saying."We expect Nifty to face resistance around 11,750 levels followed by 12,000 levels for year ahead," he said."The auto industry is nearing its next down cycle.
However, as industry is shifting towards improvisation in technology and comfort, we think that there is more scope for expansion, he said."Giving our expectation for Nifty to touch 14,000 levels in 2019, we prefer cyclical sectors, banks and capital goods," he said.Karvy Stock Broking Limited announced an 'Investment Strategy Report' here Friday.It is from report that investors would get basic fundamentals of stock, insights into financial health of Karvy, related market scenario, and outlook of company and valuations, Singh said.