NEW DELHI: After a stellar 2017, Sensex or Nifty50 may outdo your fixed deposit in terms of returns in 2018, suggests an ETMarkets.com survey.
Majority of the brokerages which participated in the survey had an average target of 11,700 for the Nifty50 and 37,500 for the Sensex.
Analysts said the New Year would be one of earnings revival and that would be the key trigger for any solid bounce in the indices.
"Our December 2018 base case target for Nifty50 is 10,800. The upside scenario is 11,700, based on the assumption that a lot of the structural reforms initiated since 2014 will slowly start driving growth in the formal economy and help expand it," said Prasanth Prabhakaran, Senior President & CEO at YES Securities.
On Friday, the NSE benchmark closed at 10,530 level. Prabhakaran's most bullish target reflects a 12 per cent potential upside on the Nifty50.
He said earnings are likely to be in the positive trajectory starting from Q2FY19, after spending nearly seven years in the negative territory. India is in a structural bull run and all intermittent corrections would be good opportunity to buy and build a long-term portfolio, Prabhakaran said.
Interestingly, brokerages had set similar targets for the indices in the ETMarkets Samvat survey too, when they had suggested up to 7-10 per cent return by next Diwali on November 7, 2018.
"With the expectation that the worst is over on the NPA side in the BFSI space, execution and capex cycles are expected to improve in the infrastructure and EPC space and with growing demand for consumer goods, the overall market sentiment is expected to improve from here on," said Kunj Bansal, ED & CIO at Centrum Wealth Management.
Bansal sees the Sensex at 34,500 level and the Nifty50 at 10,800 by the end of 2018. But after a strong rally after the state elections, Bansal's target reflects just 3.5 per cent upside potential for the Nifty50 and 2 per cent for the Sensex.
Jimeet Modi, CEO at Samco Securities, does not expect the Sensex or Nifty move more than 10 per cent from the prevailing level, but does not expect the indices to fall more than 10 per cent either.
The market has run ahead of fundamentals and, therefore, next year will be a year for earnings to play catch up, he said.
Jayant Manglik, President at Religare Securities, sees a surge in volatility going ahead, as expectations of a rebound in corporate earnings growth has already been built into prices.
With Indian market valuation at nearly 17 times FY19E consensus earnings, the downside is expected to be limited. "We expect the Sensex and the Nifty to be closer to 37,500 and 11,500 levels in 2018," he said.
Rakesh Tarway, Head of Research at Reliance Securities, said while he has no targets for Sensex and Nifty50, he feels returns on the indices would be rather subdued in 2018 compared with that in 2017.
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