2021 was a great year for the benchmark indices. Sensex scaled the last two milestones --50,000 and 60,000-- in the current year itself. It crossed 50,000 for the first time on January 21, 2021, and the 60,000 mark on September 24, 2021.
However, the roller coaster ride started when the concerns over rising Omicron cases spooked investors. Dalal Street saw a big crash on December 20 as Sensex plummeted over 1,600 points tracking losses across the board.
On a year-to-date (YTD) basis, the benchmark BSE Sensex has gained 21 per cent to 57,806 till December 29. On the other hand, broader indices, the BSE Midcap and BSE Smallcap have advanced 37.5 per cent and 60 per cent, respectively, during the same period.
As we are all set to step into a new year, Divam Sharma, Founder at Green Portfolio expects Sensex to make all-time highs in 2022. He noted that many large companies are going to come with an IPO which includes LIC, Delhivery, and Pharmeasy. The FPI inflows should regain momentum in 2022.
"We still see the broader market presenting opportunities to invest in high-quality stocks being available at reasonable valuations. Sectors like chemicals, pharma, textile should do well in 2022. We like Jubilant Pharmova, Aarti Drugs, and KPR Mills," he said.
He further added that the resurgence of Omicron and the rise in Covid cases across the Globe make a case for federal banks not going for a significant monetary tightening in 2022.
"The markets are entering the new year fresh out of a correction. The long-term growth story of Indian equities is getting stronger and stronger. We expect the market to rebound and create fresh opportunities even though the rally might not be as strong as 2021 in a lower liquidity environment," Sonam Srivastava, Founder at Wright Research told BusinessToday.in.
She noted that banks are overdue for a rebound, and pharma is also showing momentum. "Industrials, Real Estate, Metals sectors are expected to shine in cyclical growth. We are excited about the New-Age companies as well," she said.
"Unfortunately, some major global concerns can play a spoilsport for India. The virus is projected to spread rapidly, and even though it is mild, ensuing lockdowns could slow down the economy. Inflation is rising rapidly in the US. The FED might start accelerated tapering, sending shockwaves in emerging markets. Also, infrastructure collapse in China after they removed the liquidity is concerning, and it could also cause global panic," she added.
According to Dr. Ravi Singh, Vice President and Head of Research-ShareIndia, the banking, financial services, technology, housing and insurance sector will be the main driver for the market due to their improved outlook, current lower interest rates regime and augmented government spendings.
"As the economic cycle has picked up and revival in corporate earnings is strong, we expect the same strength to continue in 2022. The Power, Railways and Oil & Gas space will remain attractive for a mid-to-long-term perspective. Other sectors like Travel, Tourism, leisure, Real Estate and ancillaries like cement and other building material companies are also expected to contribute in 2022. This optimism has positively replicated on the technical charts as well. Based on the above themes, the top picks we recommend are ONGC, Gail, HDFC Bank, TCS and SBI," he added.
"Market is entering into the season of tight liquidity with anticipation of a couple of rate hikes from Federal Reserve and high inflationary environment but Indian Stock markets have time and again proved themselves as resilient and resurgent markets," Kranthi Bathini, equity strategist at WealthMills Securities, told BusinessToday.in.
"We expect up-gradation in earnings of the companies. Also, it's going to be a sector and more company-specific game than the broader index in 2022. Indian corporates are well-positioned to take advantage of digitalisation and a boom in consumption demand. Investors can buy on every dip available," he added.
Rajesh Agarwal, Head of Research, AUM Capital Market said that after the stellar run in the last 20-21 months, markets have been volatile amid concerns over Fed Tapering, Omicron cases, inflation and the possibility of RBI increasing interest rates.
"Going forward we believe that a repeat of 2021 for equity would be difficult but would still be better than other asset classes the crux however lies in sticking to quality, where strong balance sheets, ethical managements, earnings visibility should be the deciding factor," he added.
He noted that inflation would be the biggest issue across the globe, as supply-side issues may continue to impact. There have been logistical issues impacting container movements leading to a unique situation of pent-up demand.
"Globally, actions from central banks would continue to remain a key monitorable for the markets, domestically though we believe that RBI would take a pro-growth stance and rate hikes if any would be mild. Domestic companies did significant debt reductions in recent times, some of them are sitting on good liquidity, and this might lead to acquisitions/consolidations, resulting in strong corporate performances," he added.
Talking about specific sectors, he maintained his bullish stance on Textiles, Hospitality, Healthcare, Auto Ancillary, IT & BFSI. The top picks are BSE, LG Balakrishnan, Vardhman Textiles Ltd, Indian Hotels, ITC, Max Healthcare, Infosys Ltd.
Sharing the technical view, Sumeet Bagadia, Executive Director, Choice Broking said that Nifty has formed a Hammer Candlestick pattern on a weekly chart as well as trading with Higher High & Higher Low formation which indicate strength in the counter. Moreover, the index has been trading in falling channel formation and tested the lower formation, as well as the index, has been trading above the 200-Daily Moving average which suggests upside momentum will continue.
"A momentum indicator STOCHASTIC& MACD are trading with a positive crossover on the daily time-frame points out strength for the upcoming session. Overall, the index is taking support at 16500-16300 levels while it may find resistance at around 17,600-18,000 levels, once the levels are taken away, we can see lifetime high levels in the index," he said.
"On the sectoral front, NIFTY Metal, Banking & Auto are looking strong, one can take a long position on the dips," he added.
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