Sensex may touch 18,000 level by year-end: Study


“On the back of a sharply improving...earnings that, in turn, should benefit from rising availability and falling cost of capital, we expect the BSE Sensex to rise to 18,000 in the next 200 days,” Reliance Equities Research Head Subhajit Gupta said in a report. Despite the domestic factors like elections triggering the rally in the market, it is likely to be dominated by global dynamics, the report stated. Gupta said in the report. Further, the country is at a significantly superior growth and risk category relative to its past cycles or competing global investment destinations, it added.

The benchmark index Sensex gained over 46 per cent in the past two and a half months to climb to around 14,500 levels compared to 9,900 levels in April. In a comparison with its peer markets, the country’s valuation appears more attractive relative to most European markets, Japan and emerging markets, including China, Malaysia, South Africa and Taiwan, the report revealed. “Given what we have said about liquidity and India’s comparative advantages and the fact that India hasn’t had a strong government at the helm for a long time, we do not expect Indian markets to underperform global or emerging markets in the near-term,” it added. Emerging markets and in particular Asia, would benefit from a shift in global asset allocations. The Reliance Equities report pointed out that in the face of the severity of macroeconomic challenges in western markets and the rising risks of a dollar decline, Asian allocations may increase as a defensive move. Abundant global and local liquidity is now being reflected in greater credit availability and falling credit costs for corporates.

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