NIFTY -17000+ AS WELL AS 11500 IT MIGHT BE

 Well before we begin to keep this article as a matter of study and should not be taken as trading signal etc. This is just of educational purpose. only. Nifty made 14000 on 31st December 2020. Don't be so happy since we might have more left for the Indian browsers and global indices to create new record highs. The year 2021 belongs to equities as I mentioned in my previous research article. In continuation of that, we should not be surprised with Nifty touching the level of 15000 to 17000-18000 levels.  At the same time, it might surprise with wild the swing towards 12000 or 11500 levels.

 The debt market is going to be lacklustre globally and this very factor drives the equity markets. The below chart will speak enough for the same.

China will end this year as an only major country in the world to see its econ grow rather than shrink. GDP is projected to grow by 2% in 2020 and by another 8.4% in 2021. Meaning GDP at end-2021 10.6% larger than at beginning of 2020 vs 0.25% growth for the U.S economy. Hence the world economic growth will get the Indian markets into new highs.

ECB Balance sheet hit a fresh all-time high at €7,014.7bn as Lagarde keeps printing press rumbling. Total assets rose by another €6bn on QE. Total assets now equal to 69% of Eurozone GDP vs Fed's 35%, BoJ's 132% or BoE's 36%.

The Nifty will get its momentum from numerous factors in FY-22.

• Low base year effect YoY –FY-21 v/s FY-22 give a big boost to the markets & analyst taking forward outlook enhanced. 
• Valuation and price gaps will widen up as a forward-looking expectation will drive the major rally.
• Value stocks will rule the market now as we move ahead from the growth stocks.
• Few key sectors will be having strong forward guidance and the rest of the sector will add fuel only when the unwinding of the economy happens properly.
• The more Indian economic unwinds and investments, business and trade get into normal phase the market will reflect the optimism for the same.
• Low corporate taxes and cut down on expenses would spook the revenues in coming quarters.
• Vaccination success will lead to a significant boost up of forward-looking guidance in the coming days.
• Digital transformation is being adopted to re-allocate cost and hence profits will be compounded with the growth.
• The PLI the scheme will be increasing the growth prospects and investments in the country.
•  Bank Nifty holds a key position and hence strong position of the banking industry followed with liquidity increases the safety net of the same.
• When bank stock prices are low, relative to book value, banks have a stronger incentive to pay out dividends. But paying dividends reduces banks' capacity to lend and weakens their resilience to shocks.
• In response to the Covid-19 crisis, regulators and banking federations have set or recommended rules that banks should stop their dividend payouts or share buybacks in order to conserve their capital.
• From muted credit growth to a spike in credit off-take will raise the bank nifty levels.
• As the job market gets back into the Pre-covid levels retail consumption demand will be back.
• Healthy monsoon and Festive season is the additional trigger for the consumption in India.
• Hence healthy GST numbers in the long term are part of the Indian economic fate.
• Strong GST numbers will boost the climate in the long run as the economy unwinds and shift and balance of consumption come from Industrial end.

 Factors which might dominate the Nifty to scale up:

• Banking space is going to interesting to watch out how it plays the dice. The data on gross non-performing assets (GNPA) of banks are yet to reflect the stress, obscured under the asset quality standstill with attendant financial stability implications.
• Increase in delinquency due to end of moratorium might be a pullback trigger depending upon the depth of the same.
• All eyes are on the Financial Stability Report (FSR), which will be released shortly. In between the govt has already earmarked Rs.20,000 crores in the first supplementary demands for grants for capital infusion in public sector banks (PSBs), they may raise more resources from the market as an optimal capital raising strategy.
• Private Banks- are well placed and hence they hold a key to bank nifty on the other side.
• Any delinquency in the NBFC and Banking space would be the prime killer of the Nifty or Indian equity market.  
• A fresh new covid attack might be a key trigger for the markets.
• Any geopolitical war with IRAN or any trade tension between the US and China will be a key trigger for the markets to remain volatile.

GST e-invoice the system completed the journey of 3 months; Enabled more than 37000 taxpayers to generate more than 1680 Lakh Invoice Reference Numbers (IRNs) 603 Lakhs e-invoices generated in December 2020 as compared to 589 lakhs in November 2020. Blocking of the loopholes in the taxation system plays a pivotal role in the economy in coming quarters.

Debt market trouble and risk on the credit space might be a major blow for the markets in 2021. Well, the above-mentioned risk cannot be ruled out and at the same time, the helicopter money will keep the thing afloat.  The budget will play a big card for the economy and markets for FY-22. New taxation and investment benefits will drive the market into new highs.

2021 is the year of Equity for the global economy. India might face hurdles of managing any crisis but helicopter money in the global economy will keep the things alive for their economy.