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The index rose 0.3% to end at 19,413 - a record close, while the benchmark Nifty gained 0.1% to close at 22,529.05. The volatility index, or India VIX - market's fear gauge, jumped 6.3% to 21.81, suggesting traders see risks in equities in the near term.
Arpit Beriwal says: “On a weekly scale, we have seen a good buying interest from lower levels and on the daily scale, it is holding its gains. So, it is ready to hit a new lifetime high towards Rs 750-760 levels. Within IT pack, our top two bets are from midcap space, Birlasoft and LTTS.”
Valuations in Indian largecaps are reasonable and we expect 15% or more earnings growth in the next couple of years. Sectors and sub-sectors like capital goods, defence, railways capex, electronics and durable manufacturing, construction, renewable power, power transmission & distribution, China-plus-one theme plays, beneficiaries of the production-linked schemes, chemical and pharma companies etc. are mostly represented only in the mid and smallcap space.
“Sensible value will be emerging where you have some disappointments which might come up in the next couple of quarters. Tech is one space where there has been some disappointment but there will still be some challenges as we get along and there already we have seen one leg of valuation correction of 30%-40% especially in the largecap side.”
“Given that the backdrop and inflation is today a bigger issue in the US than in India, that means RBI and the US Fed are both fighting inflation. RBI has done a better job which means India is likely to have an earnings upgrade, with both the midcaps and the largecaps benefiting going into next year.”