Do you think that the equity markets have topped out? Will we see 7000 Nifty before we see 9000?

by- Jayant Manglik, President of Retail Distribution at Religare Securities Limited 

My view is that 7000 is a distinct possibility and is in fact a healthy sign for markets because the markets are currently overheated. Till there is clarity on monsoons, favourable RBI policy announcements and clearly declining crude oil prices in addition to a real turnaround in the economic scenario, markets will face selling pressure at these levels. So a move to 7000 followed by consolidation and backed by falling interest rates & a reviving economy will then push the Nifty to 9000.

14 responses

  1. Yes sir,teher is huge possibility for nifty will test first 7000 & then move to 9000.Monsoon & Inflation is the Biggest worries for the Mkt.No surprises in Q1 results for Big corporates.So,Mkt may test 7000

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  2. Nifty has gained nearly 30 percent( from 5900-7800) in last five months and it looks difficult for the index to uphold this kind of momentum ahead as well. Generally, we see a corrective phase,which could be prolong or sharp, post such vertical rise so I’ll not be surprised Nifty testing 7000-7100 zone prior to next major upswing.

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  3. There has to be a decent correction (1000-1500 points) for the bull run to be healthy. I think with more focus on fiscal consolodation and investment in capex the macroeconomic situation is going to improve ultimately reflecting on the index..

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  4. I strongly concur with Mr. Manglik’s views. As per my sense , we are likely to witness a wave of profit booking as markets seem to be overbought at current levels, wherein growth is still a concern.Unless growth picks up meaningfully, levels of around 7000 for Nifty look imminent in near term.Along with this , improved outlook towards US economy and Fed’s recent indications about winding up their bond buying program this October and possibility of an early interest rate hike is likely to lead to outflows from Emerging Markets.
    The current price structure suggests 7400 mark should be considered as immediate floor , below which significant selling pressure can be witnessed in markets leading to a drift towards 7100-7000 mark. However, from a long term perspective, dips should be considered as a buying opportunity , eyeing levels of around 8200 and eventually 9000 mark

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  5. While its true that NIFTY valuations have become rich due to over 30% increase in last few months. It may see some profit booking as well. However going by spate of positive news coming like decline in prices of commodities in international markets, declining inflation and stabilising rupee, revival in auto sales and push for Infra by government. We may not see a correction and market may rise on the back of good Q1 numbers from corporates. Though its logical to expect markets to correct before further rally however markets have a knack for behaving differently..

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  6. I neither see 7000 nor 9000 in the short term. In my view the market would be range bound between 7200 to 7600.. The triggers for the markets would be monsoon and Q1 results… Though market would be range bound, select stocks would see lot of movements.. I feel for this quarter it would be a stock picker’s market.

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  7. The level of 7000 is necessary for the market. Nifty current PE already touching 21. A ten % upward move from here makes the market overvalued and highly unstable. Earnings need to catch up with the valuations.

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  8. I feel in the current market scenario nifty should maintain a strong support on 7400 and if it breaks 7000 level then it could rally down to 6350, but if it does not act like as I feel then it would go up to 8550 by December 2014.

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  9. For the time being market looks to remain in a range and the highs would be tough to break, don’t feel that it would crack 7400 levels. We should see it past 8000 rather than 7000 on the downside

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