Money making ideas: These 5 themes to lead the next leg of rally

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If one goes by the latest projection given by select market players, the benchmark equity index BSE Sensex may touch 1,00,000 mark in the next 4-5 years. The figure shows a 57 per cent upside from the record high of 63,653.07 that the index hit on December 1, 2022. Analysts at Dalal Street believe that the performance of the domestic equity market in 2022 is supported by favorable government policies.

The 30-share index is up nearly 9 percent on a year-to-date basis through December 1. On the other hand, some global indices such as Dow Jones, Nasdaq, S&P 500 and Shanghai Composite declined up to 5 per cent. 27 percent, 14 percent, and 13 percent, respectively, during the same period.

market Outlook

Sharing his views on the Indian equity market, Anil Rego, Founder and Fund Manager, Right Horizons said, “Assuming a sustained EPS growth of 12 per cent to 13 per cent, the Sensex will cross the 1,00,000 mark in the next four to five years. Could Percent.

He further added that markets have become less sensitive to Fed rate hikes, US growth conditions and FII selling, indicating a shift towards increased exposure to equities mainly due to sustained domestic inflows. “Several growth levers such as production-linked incentive schemes, increased capital expenditure by corporates, increased exports and improving infrastructure are in play, which will propel the market to outperform most global peers,” Rego said.

Similarly, Amar Ambani, Group President & Head-Institutional Equities, Yes Securities sees Sensex at 1,00,000 mark in next 3.5 years.

Data available with Ace Equity shows that foreign institutional investors have sold shares worth over Rs 1.20 lakh crore so far in 2022, while domestic institutional investors have bought shares worth Rs 2.55 lakh crore year-to-date.

sectors to watch

So what are the topics to watch in the next phase of the rally? Rego said investors can focus on themes such as banking, auto ancillaries, consumer discretionary, manufacturing and building materials.

“Amid the rising interest rate scenario, the banking sector is benefiting and reporting strong topline growth on the back of healthy disbursement and higher loan rates, strong earnings growth on the back of good advances, lower provisioning for loans and net interest margin (NIM) expansion) is expected to continue,” he said.

With a rally of 141 per cent YTD, Karnataka Bank emerged as the top gainer in the banking sector. This is followed by Karur Vysya Bank (up 119 per cent), Bank of Baroda (up 110 per cent) and Indian Bank (up 98 per cent). BSE Bankex also outperformed Sensex in the ongoing calendar year, gaining 22 per cent YTD.

Rego further said that new launches by OEMs, rising demand and easy availability of semiconductors are driving growth across all segments in the automobile space. “We are optimistic about the sector on account of strong order book, capital expenditure plans announced by companies, earnings growth on account of demand and softening of industrial commodities. Also, the growth of the electric vehicle segment is expected to be 45 per cent CAGR over the next five years, hence we are positive on auto accessory names from the space.

The market watcher also said that the country’s per capita income crossed the crucial mark of $2,000 last year and thus the consumer discretionary sector growth is expected to strengthen with rising disposable income. He also believes that the building materials segment is set to reap the benefits of a boom in discretionary spending over the next three to four years. “Similarly, due to the government’s emphasis on promoting Make in India and PLI schemes, and the preference of global players for China+1 and now on the back of rising energy costs and supply chain constraints, the desire to seek Europe+1 is building subject as the biggest beneficiary,” said Rego.

Ambani of Yes Securities is also positive on the building materials space and believes that rising inflation and interest rates, rupee and bond market stability will provide further direction to the market.

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