An ET survey of 23 fund managers and analysts at brokerages showed that 57% expect Nifty to rise by 10-15% in 2022. While 21% expect 5-10% gains, a minority expect returns between 15-20% from current levels .
“Next year starts at a bullish point as the market has recently corrected. We expect reasonably good performance by the markets in 2022, albeit not as abundant as 2020,” said Ramdeu Agrawal, Chairman of Motilal Oswal Financial Services. “In terms of returns, I don’t think more than 15% … more than 10-15% returns.”
Nifty ended Friday on an exhilarating note at 17,354.05, posting a 24% gain for the year. The Sensex finished at 5,8253.82, up 22% in 2021.
About 42% expect the Nifty index to end in 2022 at 19,000-20000, and 33% expect the index to reach 18,000-19000.
A rebound in inflows from foreign investors is likely to boost the market, according to 94% of those surveyed.
44% see the rupee at 75, another 33% at 78
Foreign investors were selling in the last three months of 2021 offloading shares worth ‘36,500 crore during the period, having become net buyers of Rs.1.19 thousand crore in the first nine months.
44% see the rupee at 75 to the dollar in 2022, while 33% expect it to touch 78. The rupee closed at 74.29 to the dollar on Friday.
The survey showed that the information technology sector, banking, chemicals, pharmaceuticals and real estate will be the most important investment topics next year.
“Banks and IT generate more than 50% of profits in the corporate world, and they are both thriving. Both are likely to perform very well at reasonable rates,” Agrawal said.
Money managers expect large caps to be set next year.
The consensus in the survey was a 50:40:10 split between large, medium and small capital.
“It should be a better year for big companies. Big capitals are reasonably priced more after all the selling by foreign investors,” Agrawal said.
Judgment has been split on how indicators will move in the near term, with slight advantage to those who believe they may dip from current levels before going up.
About 56% of those surveyed expect Nifty and Sensex to see a decline in early 2022, and about half expect another 3-5% decline. However, 44% do not expect a further decline from current levels.
“Investors should lower their stock return expectations in the coming year. After a strong outperformance, equity markets need to consolidate,” said Vineet Samper, head of equities at DSP Investment Managers. “The first half of the markets may be lackluster given the higher fundamental impact of the December and March quarters and the impact of the third Covid wave.”
Indian stock indices ended 2021 with gains of more than 20%. In the last three months of the year, benchmarks have corrected more than 10% from their lifetime highs on October 19 – 6,2245.43 for Sensex and 18,604.45 for Nifty. At the close on Friday, indicators were still 7% off their peak.
The decline was due to heavy selling by foreign investors amid heated assessments and tightening monetary policies by global central banks – especially the US Federal Reserve – as well as concerns about the novel coronavirus variant.