Markets hit record high — some experts say it is the final leg of the vaccine euphoria
- Indian equity benchmark index
Sensexscaled to a record high of 44,523 points, and Niftybreached 13,000-mark for the first time on November 24.
- While the investors cheered the bullish market — investment experts are cautious that the market may have matured enough and is primed for a correction.
- The hope of a vaccine against COVID-19 has been a big driving factor in the current rally. Yet, as the cliche goes, the proof of the pudding is in the eating.
While the investors cheered the bullish market — investment experts are cautious that the market may have matured enough and is primed for a correction.
Sushil Kedia, the founder of Kedianomics, told Business Insider that in the next 3-4 months, a minimum 20% correction is certain. However, it can be more severe depending on the circumstances. “And in the next 6-months, I am looking at a very-very dramatic crop in the stock market,” he said, describing the current rally as euphoric and complacent.
S Hariharan from Emkay Global Financial Services also thinks that at this level, there is a certain risk to the market. “As of now, the market is pricing in a robust recovery, while discounting a smooth roll-out of the government’s vaccination drive - hence, the risks of disappointment on both these fronts pose the major risk of stalling market momentum.”
Kedia said that’s how the market has been for years that “you have to anticipate ahead of the next cycle. So this cycle looks very much matured now.”
Vaccine may be born soon but it will take time to walk
The hope of a vaccine against COVID-19 has been a big driving factor in the current rally. Yet, as the cliche goes, the proof of the pudding is in the eating.
“Much of 2021 is going to be consumed in different challenges of the corona. I think there is too much complacent euphoria in the market right now — in which on the one hand a number of people are feeling left out and on the other hand elevations are at its extreme. Technically also the markets are at a point where inexplicably large and sharp corrections are a greater possibility than this continued drop,” Kedia highlighted.
AdvertisementHowever, it is not to say that a correction will begin tomorrow. According to Hariharan, the market strength is expected to become more broad-based now, with under-owned sectors like metals and public sector companies catching up with hotter sectors like financials . A similar performance may be seen in mid-caps that have lagged large-caps in the short-term.
SEE ALSO: From IndusInd Bank and Kotak Mahindra to Bajaj Finance — seven of the top ten Nifty gainers in the last three months have been financials
Elon Musk surpasses Bill Gates to become the world’s second-richest person as Tesla’s market cap inches closer to $500 billion
- TTD approves Rs 2,938-crore budget for 2021-22
- Wholesale growth expected to continue for tractors, passenger vehicles and two-wheelers, says equity research firm Emkay
- Centre finalises One District One Focus Product to promote in cluster approach
- A Mumbai-based EV startup launched the cheapest electric car with a 200 km range
- HP's worldwide shipments grow 5.6% in fourth quarter of 2020, says IDC