Is this Bull Run sustainable?
Yes, because
- Strong earnings of the companies in the recent years will sustain the momentum
- The index heavyweights like ONGC, ITC and RIL still trading at modest valuations
- New FIIs from Japan have started investing only recently with a long term perspective
No, because
- Oil prices if remain high for a longer period, may slow down the global economy and affect Indian share market
- The risk of feds hiking the interest rates. Why? Interest rate hike may strengthen USD and investors may respond by pulling out money from emerging markets like India.
- The weakening rupee is not helping the sentiment either
- A lot of mid cap stocks are overvalued and the market should expect a correction
- Indian market is overvalued when compared to other markets like south Korea, Brazil and South Asian tigers
Conclusion: The only thing that’s certain about share market is that it’s uncertain. So both schools of thought are valid and good fodder for GD
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