For the last 6 months, it is being talked about continuously that a correction is sure to come in the market. The market valuation is high. So why isn’t the market going down a lot? On this, Nilesh Shah, Managing Director, Kotak AMC says that three things are driving the market. First money flow, second sentiment and third fundamentals. HNI investors, mutual funds, pension funds, insurance companies and foreign portfolio investors are all buying. During this time only promoters are selling their stake.
Nilesh Shah said, talking about the sentiment, the economy is opening up. Growth is accelerating. The activity level has also exceeded the level before the infection.
Talking about the fundamentals, the results of the companies are coming out strong. If these three things are there then there is no need to fear in the market. According to ET, Nilesh Shah says that when funds are high and there is fundamentals and support along with sentiment, the market does not care for apprehensions.
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When asked whether the market will continue to rally? Nilesh Shah said that the market keeps on fluctuating. Will there be a correction in the market then the answer will be yes. However, unless the fundamentals change, this will not happen. Corporate profits are now improving from a 10-year low. Despite weak GDP growth in Fiscal Year 2021, companies’ profits have increased. The profits of companies will increase in Fiscal Year 2022 and Fiscal Year 2023 as well.
Along with this, the economic recovery has also accelerated due to the decrease in corona cases. Vaccination is about to cross the 100 crore mark. The fund’s inflows have remained strong due to lower interest rates. When asked whether the coming era is of electric vehicles or fintech? On this Nilesh Shah said, of course, the coming era is of electric vehicles. It is needed due to compulsions like global warming and climate change.
The second important point in this is valuation. We recently saw that private equities have picked up stake at good valuations. Such investments will continue to meet the market’s expectations on valuations going forward.
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