Dipan Mehta expects a deep correction in the stock market, possibly as much as 10-12% on the Nifty and the Sensex. Corporate results have been disappointing, with growth rates of 10-12% but not enough to encourage buying at current valuations. Profit margins have expanded due to commodity prices, but this trend may level off. The next six months could see very disappointing earnings seasons. Banks are also facing challenges, with concerns about NPAs and slower growth in advances due to cautious lending and a war for deposits.
दिव्य मराठी - Get Latest Marathi business news on Stock and Share markets, Sensex, companies, finance, Indian economy, politics, entertainment business and current affairs on Divyamarathi.bhaskar.com
“We believe the capex cycle in the Indian economy is just starting and over the next one to two years we may see much more of this play out, earnings surprising on the upside in many pockets of the market and that will give tailwinds to the markets and individual opportunities in times to come.”
The blue chips Nifty 50 and BSE Sensex gained 2.39% and 2.29%, respectively, led by a rise in energy stocks. Faster-than-expected quarterly economic growth and acceleration in factory growth in November supported the rise in domestic equities.