‘Just a matter of time’ Jefferies’ Chris Wood on Sensex reaching 100,000 points


Christopher Wood, global head of equities at Jefferies believes that it is just a matter of time before Sensex reaches 100,000 level, media reports has stated. He further added that the Indian stock market will continue to climb the proverbial wall of worry.

“It will only be a matter of time before Sensex reaches 100,000 level. India is still like all long-term bull markets. Indian stock market will continue to climb the proverbial wall of worry. One obvious worry over the next 12 months will be the inevitable questioning of the current consensus, namely that Modi will be re-elected,” Wood said as quoted by reports.

Last year in February 2022, Chris Wood in a note had stated that India’s benchmark BSE Sensex to hit 100,000 on a five-year view i.e. by late 2026.

On 26 May, Indian shares opened higher on improved global cues, after witnessing high volatility in the previous session in which the benchmarks reversed losses in the final hour of the May series expiry day. Sensex climbed 178.34 points to 62,050.96 in early trade; Nifty gained 51.1 points to 18,372.25.

On 24 May, Brokerage group Jefferies said in a note had said that the Indian stock market may outperform its Asian and emerging market peers in the long term as lofty valuations ease and investors look to bet on the economy’s growth prospects.

The benchmark Nifty 50 Index’s price-to-earnings premium to China’s Hang Seng Index declined to 115 percent from 208 percent in end October, and is in line with the 10-year average of 118 percent, Wood, wrote in his “Greed & Fear” report.

As per the report, India’s long-term prospects have led the global brokerage to invest 39 percent of its Asia ex-Japan long-only portfolio in the south Asian country compared with 25 percent in China.

Further adding, he said, “While foreign investors have sold $2.8 billion on a net basis in Indian markets so far this year, domestic equity mutual fund inflows have remained positive.”

According to official data from the Association of Mutual Funds in India, domestic equity mutual fund inflows in the first two months of 2023 amounted to 282.33 billion rupees ($3.43 billion). The usual challenge of relatively high valuations remain, Wood said, adding that the brokerage will remain slightly ‘overweight’ on India in the Asia Pacific ex-Japan relative-return portfolio.

“The domestic demand story certainly remains intact to justify the continuing belief in the equity market. Loan growth has slowed somewhat but still remains solid … The recovery in the residential property market also continues,” Wood wrote.

Asian banking systems remain remarkably free from stresses, Wood said, citing a slide in the ratio of non-performing loans in Indian banks to an eight-year low.

(With inputs from Reuters)


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Article Source:Money Control

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