Business & Investment

Stock Market: Stocks turn profitable after a rally that ignited the budget

India’s share price, which pushed the benchmark gauge by almost 10% in a budget-driven rally this week, is hoping for earnings to trigger its next leg-up.

34 NSE Nifty 50 Kotak Securities Ltd, a local brokerage firm on Friday. Index members, who announced their December quarter results, recorded a 34% year-on-year increase in revenue, according to a note from. Analysts are betting on a stronger recovery in economic and corporate profits in the coming months as India’s daily new Covid-19 infection slows and vaccination momentum accelerates.

Gautam Duggad, Head of Research at Motilal Oswal Financial Services Ltd, said: “The macro, policy, global background, everything is in place. The market now needs only one to keep rising.

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Optimistic views on earnings have increased since the government announced a $ 500 billion budget spending plan on February 1. This has caused the benchmark Nifty 50 Index to skyrocket since April this week. The Reserve Bank of India raised its economic growth forecast on Friday, securing a market with sufficient liquidity to manage the government’s huge borrowings.

Forward earnings
Periodic rebounds are beginning to appear.

According to data compiled by Bloomberg, the material experienced the highest average revenue growth across sectors in the last quarter, boosted by a surge in profits and sales at JSW Steel Ltd. Strong lending growth from the assets of banks such as India’s largest private lender, HDFC Bank Ltd., was more than expected, despite continuing to secure more money for bad debts.

Nifty 50 members’ futures earnings forecasts have risen by more than 25% from their July lows, almost eliminating the pandemic slump. Gauges are trading at record price-earnings ratios, but market watchers are confident that profits will catch up.

Credit Suisse’s Indian strategist Neelkanth Mishra said in a podcast this year that “futures growth will grow much faster than the market rises, so price-earnings ratios will decline.” Revenue estimates continue to be upgraded, “cyclics may still outperform other markets,” he added.

In the growth budget, strategists from Morgan Stanley to Jeffreys Financial Group, Inc. are strengthening their bullish view of circulation.

Revenue wrap

  • In the transition to global digital services in the Covid era, all five of India’s largest tech companies are outperforming their earnings forecasts.
  • The car maker is back. Top car maker Maruti Suzuki India recorded a 24% increase in profits due to a recovery in consumer demand.
  • Sun Pharmaceutical Industries Ltd. And Cipla Ltd. Benefits have doubled as the healthcare sector has benefited from increased prescriptions and doctor consultations.
  • Banks were doing well, but insurers and shadow renders struggled to revive net interest income, SBI Life Insurance Co. And Bajaj Finance Ltd. Lacked a quote.It squeezed the overall performance of the financial sector

Market chatter

  • “We are optimistic about the economy and equities,” said Amit Goel, portfolio manager at Fidelity International, driven by growth and a strong structural driver of demographics. He added that sectors ranging from finance, infrastructure and real estate to automobiles and hospitals will benefit from the budget.
  • The government was relatively reluctant to stimulate demand, but “consumer stocks are likely to benefit from an organic recovery in the economy,” said Ambani, an institutional investor at Jesus Securities. Says.
  • Hiren Ved, Chief Investment Officer of Alchemy Capital Management, said: “It’s no surprise that we’ll be more than 25% revenue over the next two years.” We’re in a position to handle everything digital, high-quality and cyclical, “he said. He added that he was also positive.

Stock Market: Stocks turn profitable after a rally that ignited the budget Stock Market: Stocks turn profitable after a rally that ignited the budget

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