While there’s been a sharp recovery in the equity market in the recent times, select sectors, including banking, financial services and insurance (BFSI) will see money coming based on their prospects. This may take the benchmark equity indices BSE Sensex and NSE Nifty to their new high by Diwali.
Market watcher Nitasha Shankar, Head-PRS Equity Research, Yes Securities believes that BFSI space, which has maximum weightage in the benchmark equity indices, is gaining traction and this may support Sensex and Nifty to scale their new highs by Diwali.
“Banking and credit cycle is expected to have bottomed out and this is the sector that faced the brunt of selling by foreign institutional investors (FII) selling. Any revival in FII activity will see money move into this space,” she said. Of late, FIIs have poured more than Rs 50,000 crore in the domestic equity market since June 2022. Earlier, they sold shares worth over Rs 2.50 lakh crore between October 2021 and May 2022.
“With FII stake considered to be its lowest in many years, we believe the chunk of the pressure on this aspect is behind us,” she said.
At present, the 30-share Sensex pack traded 6.5 per cent down against its all-time high of 62,245.43, scaled on June 17, 2021. Commenting on the concerns of the US Fed moves on indices, Shankar said, “While valuations in India are amongst the highest in the world, the change in interest rates and discount rates will not be as severe as what is expected in the developed part of the world. We believe India will have amongst the highest GDP growth rates and this does support the premium. Not to mention that corporate balance sheets remain strong.”
Also read: Reliance AGM 2022 LIVE: Mukesh Ambani might go for multiple key announcements
Also read: RITES shares rise 4% as firm wins order worth Rs 361 crore