If Brent crude futures, the international benchmark for oil prices, remained around $70 a barrel then the Nifty could be around 12,000-mark soon, Manish Sonthalia, Motilal Oswal AMC feels
The market ended the week at fresh record closing high on good June quarter earnings season so far. Frontline indices rallied more than 2 percent while the broader markets outperformed benchmark indices, showing more than 4 percent rally.
All sectoral indices ended in the green except IT that lost a percent in the week gone by.
The global set up has also been stable now with Asian equities not falling even though the yuan is falling and the dollar is strong. US data remained strong while the crude oil prices have been rangebound for last two weeks after appreciating for previous eight weeks.
The market crossed all-time high as the June quarter earnings so far are somewhat better than analysts estimates, especially of quality companies, Manish Sonthalia, Motilal Oswal Asset Management-PMS told CNBC-TV18.
He said the bulk of Nifty50 has not participated in the current rally, only heavyweights took the market higher.
If Brent crude futures, the international benchmark for oil prices, remained around $70 a barrel then the Nifty could be around 12,000-mark soon, he feels.
On top of that, 9-10 percent rally could be possible from here on if earnings continue to be strong, he said, adding quality midcaps and small caps could also see a faster recovery if earnings come strong.
Banks
For corporate banks, he believes 2020-2021 going to be blockbuster years as the non-performing assets (NPA) problem is going to wane and nothing is going to be left in terms of bad assets by the first half of the next financial year.
One should be braveheart to take a call on banks now as incremental value remains in corporate banks, he said.
Midcaps and Smallcaps
Sonthalia said globally midcaps and small-caps are firing on all cylinders while in India, valuations corrected 50 percent in the recent fall and as earnings are not that bad, quality companies’ shares are going to perform well. “So much overdone and decent earnings are likely then one can see a lot of stocks at attractive levels. The second half of would be good for the market.”
