What does Samvat 2077 have in store for the stock market

Samvat 2077 - the new year as per the Hindu calendar starting Saturday - could be a test of nerves as a euphoric market awaits durable revival signs from the economy and corporates to justify its recent record-breaking run. Given abundant dollar liquidity, the stock market is expected to edge higher after a rollercoaster Samvat 2076. Goldman Sachs raised its Nifty target to 14,100 - 11% up from Friday's close of 12,719.95. Pricey share valuations and a rebound in Covid-19 cases could cause turbulence.WHAT TO EXPECT IN SAMVAT 2077Covid-19 vaccine Fast-tracking of a vaccine will be crucial for a return to normalcy and risk-on market sentiment to sustain. Delays and/or a fresh surge in infections could lead to sharp selloffsUS stimulus Liquidity actions in the US will remain among the biggest drivers for EMs like India. Adverse remarks on inflation by the Fed will spoil this partyDomestic economy Investors are betting on a sharp GDP revival in 2021. Disappointment will make the markets vulnerableCorporate earnings Share valuations at 43 times are way above the 15year average of 23, making it crucial for companies to deliver 79220101WHAT COULD INVESTORS DO1. Asset allocation without excessive exposure to any asset will be critical to lower risks.2. Raise exposure to large banks and battered industrials, energy and metals shares, which could surprise as global investor interest is slowly drifting to value stocks.3. Be choosy while picking tech and pharma sectors, which are richly valued.4. In bonds, focus on safety such as AAA-rated securities or debt MFs that hold them.5. Gold could underperform in the near term once the vaccine is approved. SIPs in gold should continue.

from Economic Times https://ift.tt/3pqfoXn