Sensex, Nifty 50 Eyes on New High in One Year: The market can reach new highs in the next one year on the back of the government’s pro-growth policies and strong earnings of corporate companies. Brokerage firm ICICI Direct estimates that in the next one year NSE Nifty can touch 20 thousand and BSE Sensex can touch the level of 66600. Talking about this calendar year 2021, so far this year, the Sensex and Nifty have jumped up to 25 percent.
The brokerage firm believes that the stock market has benefited from the increasing digitization of equity by investors as an asset. The brokerage firm has also attributed the rise in the market to a large number of new demat accounts. Below are the major factors on which the market can reach new heights.
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growth spurt policies
The domestic stock market will get the support of government policies. During the pandemic, the government introduced PLI (Production Linked Incentive) schemes for several sectors. Under this, new technology in the auto sector was brought to this scheme. Recently, the government announced a relief package for the telecom sector. This type of announcement helps in strengthening the market sentiment.
The financial health of the central government is expected to be strengthened by the National Asset Monetization Pipeline and better tax collection. Under the monetization scheme, the government can raise Rs 6 lakh crore from FY 2022 to FY 2025. GST collection is also exceeding Rs 1 lakh crore every month. If the government has more money then it can be used for capital expenditure and infrastructure plans.
speed up vaccination
The vaccination program in India is progressing rapidly and about 69 percent of the eligible people have received at least one dose of the corona vaccine. According to an estimate, by the end of this year, about 200 crore vaccine doses will be taken. If the vaccination is more, then the economic recovery will also be faster and due to this the stock market will also move towards new heights.
real estate boom
The real estate sector was badly affected due to the Corona epidemic, but in September 2021, it saw a great boom and a record number of people booked homes in cities like Mumbai. The prices of houses are increasing now. This boom in the real estate sector will also have a positive effect on the stock market.
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After the bumper listing of online food delivery platform Zomato, other Indian startups are also preparing to be listed. Apart from Paytm, Nykaa and Oyo have submitted papers for the IPO with the market regulator SEBI.
Increase in earnings of corporate companies
Corporate earnings were growing at a CAGR (compound annual growth rate) of around 5 per cent in the financial year 2019-21. However, brokerage firm ICICI Direct estimates that now the situation is getting better and their earnings can grow at a CAGR of about 26 percent from FY 2021 to FY 2023. This will help the market.
(Article: Kshitij Bhargava)