The Indian stock market started the financial year 2024-2025 on a strong note with both the benchmark indices Sensex and Nifty 50 scaling fresh record highs. In the seven sessions of the month of April, both frontline indices rose almost 2% each.
On Tuesday, the benchmark Sensex crossed the 75,000 level for the first time and the Nifty 50 jumped to a record high of over 22,700, gaining half a percent each.
Optimism about healthy corporate earnings, robust domestic economic growth, expectations of a favorable general election outcome and positive global cues supported the Indian stock market rally.
Read also: Why is Indian stock market flirting with record highs? – explained with 5 reasons
However, analysts have flagged concerns about the strained valuations and expect a sharp correction in the markets.
Sanjiv Bhasin, Director, IIFL Securities foresees a “sharper than expected” correction in the market in the coming fortnight and believes investors should take some money off the table.
“The markets seem to be pricing in all the positives. Investors should remain vigilant as markets are in overbought territory. The valuations are priced in at 24-25x future earnings. A sharper than expected correction may be seen in the next fortnight,” said Bhasin.
Read also: Sensex rises half percent, crosses 75,000, Nifty 50 above 22,750: Is stock market rally sustainable?
He suggests that investors can book some profits in the market at these levels before the winning seasons.
Talking about the corporate earnings for the quarter ended March 2024, Bhasin said it will be a mixed bag, with private banks and specialty chemicals companies likely to see a rebound.
While Sensex touched the 75,000 level on April 9, market participants are eyeing the 1,00,000 level for the 30-share index.
Read also: Nifty 50 may hit 90k by 2034; General Election 2024 major trigger for Indian market, says Sunil Damania
However, Bhasin believes it will take a little more time to reach that milestone, but has given his Sensex target for December 2024.
“Sensex would take about one-and-a-half – to – two years to reach the 1,00,000 milestone. However, by the end of 2024, we expect Sensex to see levels around 85,000,” Bhasin said.
He believes that the global geopolitical situation will strengthen by the end of the year and domestic incomes will remain firm, which would drive the markets this year.
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Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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Published: 09 Apr 2024, 12:56 IST