21 March 2021

Stock Market outlook 2021

By DICC Institute

The Indian stock market outlook as with February has been comparatively come up with low-interest rates as expected. These low-interest rates are globally and optimism around all the present vacancies. There is a pro expansionary budget being provided so that the floor of valuation becomes quite easy to be explored. This is however done most of the investigation related to the earning growth of the government decision follows. These investors will anticipate the result sooner or later that is a true thing. However, these things have led to some serious new highs for nifty. The risk can easily be arising from the rising of the price of oil, the rising in interest rates due to the fiscal deficit and of course the synchronous global market and the correction of Us multiyear economic expansion that is behind this whole thing too. 

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Review of Stock Market

At the ending of January 2021, nifty closed at the price of 13,234 which was around 14% higher as compared to the year 2020. Also, from the last 3 years, the Nifty is up to 23% that gives the translation of ~7% CAGR. There is however only a 14% total return that was noticed this year. Comparatively less and something to worry about too. In that too 10% came from just four stocks which are HDFC bank (1.43%), Infosys (3.43%), Reliance Ind (2.81%), and TCS (2.2%). This all results in new highs for nifty. Apart from this, the new rally is been led by the cyclical stocks that were once beaten down due to the uncertainty people encountered about the overall economic growth. Also, as per the suggestion made by the incremental macro data, there should be improvement made in the economic activities going on so that the proper utilization is done. The unabated Fll however flows into the emerging market so that can somewhat lead to the new highs that are caused to nifty. The pro expansionary was announced back on 1 February 2021 that came up with some suggestion that can be implemented so that better results can be seen in the coming months.

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This way it will be beneficial for both the government as well as the investor sector disappointing none. The stocks that are been benefited from the circumstances created during the lockdown may be somewhat cool off but relativity the individual stocks has reported some quite amazing results. This will surely continue to perform in the upcoming lines as well and yes, we cannot forget the earning too. There has been a broader sector found in which we can start working as the reports show come good comings. Some scenarios can be considered where the economic recovery may extend to all the earnings of the growth in a more sustained manner in selected sectors. Also, after the inflows of Rs 45,000 crore in December. The Fll of the bought of additional of Rs 19,500 crore that is worthy of the stock made in the month in January 2021.

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Outlook of Stock Market

As per the date, the average that is actually upside of the coverage universe is likely to reach about 10% CAGR over the next 3 years based on the current estimates. This is the valuation of the companies goes up to every quarter if the companies that report the growth of the companies earning. These changes can improve the upside potential risk that is related to stocks. If these changes will be growing the potential market, then the system will be set automatically in use. There is an upward revision made in the sectors where there are chances to see a sustained recovery in both earnings and cash flows. The nifty 50 index trade is been noticed above its fixed value which of course open the pockets of extreme overvaluations and undervaluation.

Various options are looked forward as an opportunity in the infrastructure, building material as well as export-oriented items. There is also an increase in the added stocks in the capital goods and infrastructure that is been started seeing sustained growth as compared to the volatile growth being organized earlier. Also, there is continues to look forward to the opportunities that can serve good triggers in the last 2 years. This is more likely because they are not yet confirmed whether the broad-based recovery will be happening automatically as they have started investing in the companies ahead of them.

  1. Such as coming out of the sector consolidation as well as the dept reduction
  2. Introducing all-new products within the market
  3. Coming up with the technique of commissioning new capabilities  
  4. Apart from this executing new order in the hand

All these activities will surely provide certain growth rather than the plain anticipation as using the export-oriented companies for recovery is far better than the western countries ideology.

Conclusion:

The information shared will help you understand the stock outlook in a better way for the year 2021. I hope the content was appropriate.         

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