Stock Market Outlook: It is not in everyone’s capacity to understand the movements of the stock market, but there are some experts who surprise with their accurate opinion on both its technical and fundamental aspects. Kishore Ostwal, CMD of CNI Research has given his opinion on how the market is going to move ahead and has given his estimate on the further outlook of the stock market.
Opinion of Kishor Ostwal of CNI Research
Kishore Ostwal says that whenever someone says that Nifty will reach the level of 15200, I am surprised. Giving a bold statement for the market does not mean predicting a fall of 3000 points. However, before we can enjoy the market boom, the traders tried to pull down the market by doing short trades, but when Nifty failed to cross 18500 this week, shorting is being advised. Although it is true that when there are not many bullish people in the market, then the market cannot be bearish. As far as PE and other things are concerned, I don’t see market going down further.
Can compare with August 2022 report
If you remember my August report, at that time Nifty was at 15200 and PE was only at 15-15. I had said at the same time that on the basis of the study, PE is likely to reach the level of 25, that too within 6 months. And now 3 months have passed and we have come to PE of 21.89 and it is a little away from the average of 25. In the past years, after crossing the PE level of 28.7, the market has declined. Now I do not expect much fall in the market because neither Nifty nor Dow Jones are in the risk zone. If again this level goes up to 28.7 then we can easily expect to see 24000 level in the market without repeating the historical mechanism.
Let us now see how our Prime Minister Narendra Modi has made India a big player in the business world during his journey of 8 years.
Recently PM Narendra Modi has given a statement in G20 Summit in which he has said that India never thinks small and yes it is absolutely true. He never thought small whether it was Balakot or any other occasion. Gone are the days when Indians were not considered to count. Now we are the second largest consumer of steel in the world. The Ministry of Heavy Industries has put this on record that now we are doubling the steel capacity in a year and it is going from 154 million tonnes to 300 million tonnes. This is an indication that both vertical and horizontal expansion is taking place in the metal. (This is also one of the reasons why I am bullish on metals).
I would like to tell the progress of India through some data here- Note-
The country has developed and the market has also developed. FPI investment has come down from Rs 8 lakh crore to Rs 47 lakh crore in just two decades. At the same time, DII AUM has also come down from 12 lakh crore (year 2014) to Rs 39.50 lakh crore (this figure is till 31 October 2022). Mutual fund folios have increased to 13.64 crore accounts from 10 crore accounts a year ago. BSE investors have come to 13.64 crores within a few years which is a huge increase from 3 crores to here. This was the idea of the mind of Prime Minister Narendra Modi who has taught the country to bear the aftershocks. To bear the brunt of FPI investments since 2014
Many efforts were made, the result of which is being seen now. I am sure the day is not far when DII AUM will be higher than FPI AUM.
FPI investment reached lifetime high
FPI investment reached life time high when Narendra Modi was elected the Prime Minister of the country for the first time i.e. in the year 2014. After this, from April 2014 to March 2015 i.e. in 12 months, FPI invested Rs 1.10 lakh crore. After such a huge investment, there was a tremendous boom in Nifty and it reached from 6200 to 9000 during this period. It is worth noting that since the Indian stock market was opened for foreign investment in the year 1991, since then this was the highest foreign investment made by FPIs in Indian markets.
After this, talking about Kovid-19, the level of the market was seen up to 60,000 and the market also broke, but it was only for a short time. In May 2020, FPIs again came out to invest in the domestic market and this time they invested a record Rs 2.89 lakh crore ($ 38 billion) during the 16 months from May 2020 to September 2021.
Indicator of India’s strength
It is worth noting here that in the last 8 years the size of the market has increased unexpectedly so much that now no one can ignore India. From a record purchase of $17 billion in the year 2014 to an additional purchase of $38 billion during the year 2021, immense money has come into the market. As you know FPIs are ruthless creatures who can make or break any market. During September 2021, FPI decided to measure the depth of Indian markets. This was a tough and true test for the domestic market developed in Prime Minister Narendra Modi’s New India system. In this, during just 9 months i.e. from October 2021 to July 2022, FPI sold Rs 2.81 lakh crore ($ 37 billion). This was the time when we saw war, inflation, rising interest rates and many more difficulties. However, if we look at the decline of Nifty in this, it was 1900 points, which will be said to be 11 percent (came down from 17100 to 15200). Now if we look at the meaning of this, then in a market which saw the purchase of $ 38 billion during 2021-22, if the entire $ 37 billion is sold in just 9 months, then it clearly means that a new India has emerged in the form of New India. Standing firmly on the global stage.
FPI became liwal after 9 months of continuous selling
Domestic institutional investors continued to buy despite the deep and sharp fall in the market. Now in July 2022, FPIs have become bullish again and since then till 15th November 2022 i.e. during 3 months, FPIs have bought Rs 97000 crore ($12 billion). However, if we look at the market data, the FPI AUM was Rs 47.94 lakh crore in August 2022, which has now come down to Rs 47.97 lakh crore in November 2022 as well. This means that in these 3 months, even though the IT and banking sector have gained heights and account for a total of 53 per cent of the market’s gains, their AUM has remained flat.
Buy value stocks in the market without hesitation
During the journey from 2014 to 2022, the level of Nifty from 6200 to 18400 is the result of the vision and policies of Prime Minister Narendra Modi. G20 meeting is to be held in India next time and now India has emerged as a new economy which the whole world is watching. If India achieves 7% GDP this year (which I believe), then nothing can stop Nifty from going up to 22000 first and then up to 24000. So, if you are a trader, keep aside all the nonsense and make a strategy to buy on dips and buy microcaps without any hesitation.
Our opinion on the shares
We had recommended SBI stock when it was at Rs 140 and now it is at Rs 600, we are reducing our investment in it. We are doing the same with Bank of Baroda, Karur Vysya Bank, Kotak Mahindra Bank etc. We had also recommended Raymond at Rs 140 and see now it is at Rs 1400 so we are reducing the exposure.
Our strategy remains the same – book profits in stocks that have run high and don’t make fresh purchases. Instead invest in New Age stocks which are the future of India- such as- MK Exim, Integra Engineering, RDB Rasayan, Metal Coatings, Aanchal Ispat and Aakar Auto. Aakar Auto is a once in a decade stock which is similar to our research of Jamna Auto’s market cap of Rs 200 Crore – which is now at Rs 4500 Crore.
Jayaswal Nrco stock can also be taken care of which is a good candidate in the mining sector and is generating revenue of more than Rs 6000 crore.
With flour prices having more than doubled in the USA and Singapore and the Indian wheat industry falling by more than 60 per cent – there are two stocks that could do well going forward. These are Sunil Agro and GTV ENGINEEIRNG. Both have good exposure in the food business and are particularly well placed in wheat derivatives.
Disclaimer: The market levels and stocks mentioned here are the stocks researched by CNI Research. Be sure to consult your investment advisor before investing. ABPLive.com is not responsible for any kind of loss.
read this also
Air India: Premium economy class will start in Air India flights from next month, know what will be special