Skip to content
Search

Latest Stories

Where will be Sensex in next five years?

Where will be Sensex in next five years?

AS Indian stock markets have hit record highs, there are mixed signals from analysts about the road ahead for equities in the short term.

With the BSE Sensex trending at dizzy levels of around 60,000, market participants raise a note of caution about the near future, while largely maintaining bullish views about long term outlooks.


Stock markets have rallied worldwide, but India outpaced its global peers, surging 25.77 per cent since January. While the Nasdaq went up 16.75 per cent during the same period, the UK’s FTSE 100 saw a modest uptick of 7.30 per cent.

Analysts feel that Indian equities, which are richly valued now, could become vulnerable to earnings disappointments and negative news flows, although there are views that a full recovery from the pandemic could improve the revenues of companies.

AK Prabhakar, head-research at IDBI Capital, expects the market to double from here to around 120,000 levels in five or six years, but the continuous rally so far without meaningful corrections since the 2008-2009 lows is a matter of concern.

“Post 2008-2009 we have never seen any major correction. A rally for almost 13 years without a correction is a concern in the short term. But in the long term, I am very bullish as I expect the market to double in the next five-six years, which is almost 15 per cent CAGR (compounded annual growth rate) returns,” he told Eastern Eye.

“I would be 80 per cent invested” at current levels, he said, adding that in case of a correction, he would fully invest his investible surplus.

According to Christopher Wood, global head of equity strategy at Jefferies, the Sensex is headed towards 100,000 levels in five years, although there is a risk of a correction in the short term.

As buying from domestic and foreign funds and retail investors meant the Sensex more than doubled from the March 2020 lows, India’s market capitalisation has soared to $3.44 trillion (£2.51trillion), surpassing France in the process to become the fifth biggest in the world.

At the current price-to-earnings (PE) ratio of 25.53, the bellwether index of the Bombay Stock Exchange is the second most expensive among large markets globally, behind the Nasdaq.

Prabhakar agreed that the rally has made the market expensive in select sectors.

“Now earnings growth or EPS expansion looks possible as multiple factors, notably Covid-19, have led to a major shift from unorganised to organised sectors. Most companies have learned to cut costs which has boosted margins.”

India, which is benefiting from the current trend of multinational companies geographically diversifying their manufacturing away from China, is the “best place for equities” with the caveat that investors are in the right sectors and stocks, he said.

According to him, the private life insurance sector, telecom, retail, solar energy, electric vehicles, realty, and select big banks look attractive.

The market analyst advised investors to be cautious about automobile companies, microfinance institutions and small banks.

More For You

JLR-Getty

A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England. (Photo: Getty Images)

Getty Images

UK car exports to US rebound after trade deal

UK VEHICLE exports to the United States rose in July after a new trade deal between London and Washington reduced tariffs, industry data showed on Thursday.

According to the Society of Motor Manufacturers and Traders (SMMT), exports increased 6.8 per cent in July to nearly 10,000 units, following three consecutive months of decline.

Keep ReadingShow less
Relatives of jailed Briton appeal to UK minister in AgustaWestland row

Christian Michel

Relatives of jailed Briton appeal to UK minister in AgustaWestland row

THE family of Christian Michel, the British businessman accused of acting as a middleman in the AgustaWestland VVIP helicopter deal, has appealed to the UK government to push for his release from Delhi’s Tihar Jail.

Michel’s relatives met Foreign Office minister Catherine West in London on Tuesday (26). The Foreign, Commonwealth and Development Office (FCDO) said the minister listened to their concerns and updated them on ongoing steps being taken.

Keep ReadingShow less
Blackburn loses Issa empire as brothers move EG Group to US

Zuber and Mohsin Issa (Photo: LDRS)

Blackburn loses Issa empire as brothers move EG Group to US

ASIAN entrepreneurs Mohsin and Zuber Issa are moving the headquarters of their global forecourt company, EG Group, from Blackburn to the US in preparation for a major stock market listing in New York.

The firm confirmed that its main office will relocate to Charlotte, North Carolina, while a new base in Bolton, Greater Manchester, will handle its remaining UK operations, the Telegraph reported. The change brings an end to almost 25 years of the company being run from Blackburn.

Keep ReadingShow less
Migrant hotel workers call off strike after reaching agreement

Workers at Radisson Blu hotel in Canary Wharf

Migrant hotel workers call off strike after reaching agreement

WORKERS at the Radisson Blu hotel in Canary Wharf have cancelled a planned six-week strike after reaching an agreement that met all their demands.

The group of housekeepers, most of whom are migrant women from Nepal and members of the United Voices of the World (UVW) union, were due to begin industrial action on Sunday (31). It would have been the longest hotel strike in the UK since 1979, a statement said.

Keep ReadingShow less
enforcement directorate

The Enforcement Directorate searches were conducted at locations linked to the Gupta brothers, Piyoosh Goyal of World Window Group, and entities such as Sahara Computers and ITJ Retails Pvt Ltd.

Getty Images

India agency acts on South Africa request in Gupta brothers probe

INDIA's financial crime fighting agency, the Enforcement Directorate (ED) on Tuesday carried out searches at locations connected to the Gupta brothers of South Africa and their associates in a money laundering case.

The action followed a Mutual Legal Assistance Request (MLAR) received by India from South Africa in connection with the "state capture scam," reported PTI quoting sources.

Keep ReadingShow less