Sensex may touch 23,500 level by year-end: RBS

Tags: Companies
BSE Sensex is expected to be at 23,000-23,500 level by the year-end because of lower valuation and uptick in company earnings as economic growth picks up, British lender RBS' wealth management arm said today said.

"We expect the Sensex to be at the 23,000 or 23,500 levels and the Nifty to be at 7,100-7,200 level by the end of 2014. The general election is one of the biggest events to look out for and the formation of a stable Government will boost up the markets further," RBS Private Banking's chief investment officer for the country Rajesh Cheruvu said.

He said the current valuations make the country an interesting bet, while the general expansion in the economy will help boost earnings and hence investor interest.

Initially, markets expected the Narendra Modi-led NDA to form a government but recent progress made by the Aam Aadmi Party (AAP) has tempered expectations, CIO for Asia and Middle East Gary Dugan said

Cheruvu said there would be a shock in the markets if a coalition of regional parties forms the government, but pointed to the United Front rule in the late 1990s to say that even such a coalition takes market friendly initiatives.

Dugan said his company was advising clients against going for the developed world and asking them to go for the emerging markets instead and added that India is the second best bet after China.

In India, the inflation scenario is turning up and factors like the good monsoon will move it down, Cheruvu said, adding that this encourages the bank to estimate rate cuts if up to 0.75 per cent by the Reserve Bank between April and December.

This will push up the lagging investment climate and cheer the markets, he underscored.

On stocks side, Cheruvu said the year will see a return of investor interest in the cyclical sectors like metals, auto and power utilities to return as against the present defensive play.

The country will also be able to do good movement on the twin deficits---current account and fiscal --- front, which will help avoid a downgrade of the sovereign ratings, he added.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi must not be lax in weeding out mutual fund houses

    Last May, capital market regulator Securities and Exchange Board of India (Sebi) amended the Sebi (mutual funds) regulations, 1996, directing all fund

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Customer orientation needs human touch

In the mid-1990s, while researching drivers of corporate excellence, we ...

Kuruvilla Pandikattu SJ

Can religion help us protect our planet?

Though not factually true, in popular imagination, the relationship between ...

Shona Adhikari

Pop art is truly a feast for the eyes

The internationally reknowned Bruno Art Group’s presence in India had ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture