Can expect a 5-7% Santa Claus rally in 6-8 weeks: CLSA on Indian markets
[hfe_template id='11223']
[ad_1]
The stock market may see a "Santa Claus rally" of 5-7% over the next six to eight weeks, said Vikash Kumar Jain, India strategist at brokerage CLSA.
"I think a lot of the interim bad news is now in the price. With sentiment cooling off, I am arguing for a possibility of some kind of at least an interim relief rally," said Jain.
Jain said the banking sector could be leading this short-term rally as the bond yields have moved up since Donald Trump's election, which is beneficial for the lenders. Jain added that the valuations of these stocks aren't stretched yet.
In the medium term, Jain said India's markets might see continued FII selling. "A good $800+ billion (of FII money in India) is non-India dedicated AUM (assets under management). They react to events which may not be directly linked to India," said Jain. "The investors in these funds have invested in an EM (Emerging Markets) product and in their minds, the perception of EM is very closely linked to China. So, they might simply pull out money because of things not doing very well in China. So, on an absolute basis, India might still not go up significantly. But on a relative basis, it may not fall as much as the other markets."
[ad_2]
Source link
https://mrgaga.in/can-expect-a-5-7-santa-claus-rally-in-6-8-weeks-clsa-on-indian-markets/?feed_id=44643
Jain said the market has already absorbed the selling by foreign investors, geo-political tensions, some large IPOs and a weaker results season in the last couple of weeks.
"I think a lot of the interim bad news is now in the price. With sentiment cooling off, I am arguing for a possibility of some kind of at least an interim relief rally," said Jain.
He also said that seasonality could play a role in this, as the market has rallied three out of four times in December in the last thirty years. "The median return is 2-3% this month (December)," he said.
Jain said the banking sector could be leading this short-term rally as the bond yields have moved up since Donald Trump's election, which is beneficial for the lenders. Jain added that the valuations of these stocks aren't stretched yet.
In the medium term, Jain said India's markets might see continued FII selling. "A good $800+ billion (of FII money in India) is non-India dedicated AUM (assets under management). They react to events which may not be directly linked to India," said Jain. "The investors in these funds have invested in an EM (Emerging Markets) product and in their minds, the perception of EM is very closely linked to China. So, they might simply pull out money because of things not doing very well in China. So, on an absolute basis, India might still not go up significantly. But on a relative basis, it may not fall as much as the other markets."
Comments
Post a Comment