Winning Bizness Desk
Mumbai. All the stock markets around the world continue to fall. Monday saw huge selling in the Indian markets on Monday wherein Nifty once again closed below 17 thousand. Sensex and Nifty both fell by more than 1 percent. The continuous decline in the market has started raising the question whether the Indian markets will once again go to the level of June 2022. The discussion of the market going down further has intensified after the record inflation rate in America and the stock markets there touching the level of June 2022. Manish Jain, Institutional Business Head (Equity and Fixed Income), Mirae Asset says that the Indian stock markets are currently trading well above their June 2022 levels. He says that the Indian market can fall further only when there are some special events. In June, Nifty had gone up to the level of 15,293.
Market is strong
Experts are of the opinion that Nifty can touch the June level only if it falls 9-10 per cent from the current level. This decline can come only if India's trade deficit remains at around $ 28-30 billion per month. Rupee remains under constant pressure and its price should be close to Rs 85 per dollar. In addition, US Treasury yield growth should not stop and the gap between US and Indian 10-year government bond yields should remain very small. Crude oil prices also continue to rise and it should reach a record high. Along with this, the earnings cannot justify the valuation. If all these events happen, then only Nifty can go to the level of June 2022.
Will inflation be in control?
According to an economist, uncontrollable inflation in America is putting pressure on all the markets. Right now it is not fair to expect any magical fall in US inflation. According to IMF and BoFA Global Research, once inflation crosses the threshold of 5 per cent in developed economies, it takes an average of 10 years for it to fall to 2 per cent. Therefore, at present, it seems impossible for US inflation to come to the level of 2 percent next year.
DII will support the market
According to a market expert Manish Jain, if we look at the flow of money in the Indian market, one thing comes to the fore that now domestic institutional investors are investing good money in the market. While foreign institutional investors pulled out $55 billion from April 2021 to June 2022, domestic institutional investors invested $45 billion in the market during this period. 5,600 crores were invested in the equity market through Systematic Investment Plans (SIPs) 5 years ago today. At the same time, in the financial year 2022, this figure has reached Rs 16,000 crore. In the financial year 2023, it may touch the level of Rs 18,000-19,000 crore.