Market Guru Anil Singhvi reveals 3 factors that will keep Indian stock market strong and 2 triggers to watch
Zee Business Managing Editor and Market Guru Anil Singhvi today, while commenting on prospects of Indian markets vis a vis global ones, said that three things have boosted domestic markets - strong results for the September quarter, better GST Collections and strong sales figures in the festive season.
Now, Singhvi says 2 triggers are extremely important for the markets going forward. Singhvi said, "First one is related to US elections. Voting by citizens of America to elect the next U.S. President is going to happen tomorrow and results of will be keenly awaited. Important to understand by when the outcome of the results will be known. And also, whether Trump will be re-elected as President of the U.S. or there will be change in Government. Also, how smoothly will the transition happen, in case there is a change, are all important things to watch for."
Second, the Market Guru said were the rising corona case globally. This is a very important trigger. Britain is going through a complete lockdown again and it will last for next one month. Apart from essential services, Restaurants, Pubs and other public places are going to remain shut until further notice. Schools are going to remain open. This indicates that Europe is going to remain under pressure for some time due to coronavirus issues.
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अनिल सिंघवी- सिंतबर तिमाही के मजबूत नतीजे, बेहतर GST कलेक्शन और फेस्टिव सीजन में बिक्री के दमदार आंकड़ों से घरेलू बाजार को सहारा#EditorsTake #USElectionOnZee #StockMarket @AnilSinghvi_ pic.twitter.com/WDYWPL9k2b
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Singhvi said that these are the two important triggers that investors in particular, need to monitor globally.
On the other hand, Singhvi said that the Domestic triggers are extremely strong when compared to global triggers.
Firstly, Q2 results of domestic companies have been extremely strong, though some stocks have witnessed profit booking after results being announced. Result of companies from I.T. Sector, Auto, Cement, and Banking sector have been above analysts’ expectations and this is the most important trigger of Indian markets. Analysts and experts may have kept expectations lower this quarter due to coronavirus, however, in absolute terms also the results have been much better.
Second, After 8 months, GST collections have crossed 1 lakh crore mark. Excluding compensation cess of 7000 cr to 8000 cr, the figures would come to 97000 cr or 98000 cr which is still much better than expectations. So after considering adjustments also the GST numbers indicate that Indian economy is slowly and steadily recovering towards pre-covid levels.
Lastly, Auto sales due to the festive season have been extremely encouraging. Hero Motocorp sales have been over 8 lakh units for the month of October. Also, Maruti sales have been up by over 19% to 20% indicating that auto sales have been extremely good. Real Estate and consumption sectors are also seeing demand uptick when compared to early stages of the covid period.
To summarise, Singhvi said that the good result season, strong GST Numbers and Auto sales demand during the festive season indicates that domestic markets are strong and recovering. This shows the strength in Indian economy while U.S. elections and rising corona cases globally are 2 important triggers to monitor in global markets.
Singhvi said the market reacts to news and situations that are unknown and unexpected. However, markets may not react to news that is discounted or known to the markets. The fall that the U.S. market witnessed last week shows that it will be difficult for President Trump to win election this time. The U.S. markets have started discounting the outcome of the election. However, if Trump loses the election, the market will definitely react negatively for at least once.
He added that the markets may witness sharp up move or down move depending upon the uncertainty related to U.S. elections. If Trump loses then the U.S. market may fall another 5% from here and if he wins the market may rise 5% to 8% from here as well. Market will react due to the uncertainty of the outcome.
Also, Singhvi said due to the rising number of Corona positive cases in Britain, France, Germany and the U.S. is going to impact global markets. Record number of daily cases registered in the U.S. markets (over 1 lakh cases in a single day) and Britain again going into lockdown for 1 month is a hurdle for markets going forward. Markets have started discounting this news unless the situation worsens from here. Recovery in cases could surprise the markets positively as well.
Anil Singhvi thinks that even though domestic market triggers are strong enough and known, global uncertainty will definitely impact the domestic markets. One should closely monitor global markets due to uncertainty.
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Singvi explains that in case if the U.S. markets fall due to negative election outcomes or rising corona cases, domestic markets may not fall as much as the U.S. markets. Also, if the U.S. markets rise due to favourable election outcomes and control in the corona case, domestic markets may rise more strongly than the U.S. markets.
Finally, Singhvi concludes that Strong domestic triggers will support the markets at lower levels while global uncertainty will keep the upside capped. These strategies should be followed for the next 7 to 10 sessions unless one gets clarity on election outcomes and corona related situations. Indian markets will closely monitor Dow Futures before the day begins for the next few sessions.
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