After an eventful 2021, what will it be like for the stock markets in 2022? Will the investors be able to make money in the new year and which are the sectors or segments that are likely to give good returns? What will be the triggers for domestic and global markets and how would the Foreign Institutional Investors (FIIs) view the Indian markets? If these questions bother you, expert Basant Maheshwari throws light on these issues?  

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The Co-founder and Partner of BM Wealth Advisors LLP spoke exclusively to Zee Business Managing Editor Anil Singhvi to give the market outlook. 

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Maheshwari said that investors must start afresh after reaping rich rewards since the recovery from a March 2020 crash. Giving a cricket analogy, he said that a fresh stance must be taken by investors in 2022, now that they have hit a century in 2021. 

He said that the markets are unlikely to see a free run again, this year like it did in 2021. 

The markets have boomed on the back of liquidity, with trillions of dollars put into the system and this money inflow is nor receding. 

This is not to say that the market will fall dramatically as USD 8-9 trillion is still present in the markets, he said clarifying that the bull run will be restricted.  

The investors must be cautious and selective while picking the stocks, the Co-founder said.  

He was of the view that the Indian markets will follow the US markets and will respond to how the Dow moves. There were talks of decoupling but it now appears that there has been a recoupling, Maheshwari said.  

On the FIIs pulling out money from the Indian markets, Maheshwari said that it was a complex issue. He was of the view that 80 per cent participants in the markets act with a short-term view. As an example, he said that the moment Dollar index hits 96, the general view is to exit. 

What they don’t understand is that the Dollar index has 57 per cent weightage of Euro, and the condition of Europe is already weak. If euro weakens, Dollar index goes up and the domestic investors and FIIs sell on movement of the Dollar index.  

He expects a range bound market with 1500-2000 points up or down. He said that FIIs are unlikely to indulge in heavy buying or selling. 

On Robinhood investors or new investors, Maheshwari said that the situation does not inspire a lot of confidence. They have been a beneficiary of one-way rally and on market corrections they could look to make exits on first or second dips, he further said. The sustained buying is expected from Systematic Investment Plans (SIPs). 

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The downside risk in 2022 is limited unless there is some fundamental shift, he said adding that Nifty50 is unlikely to breach 16,000. It would come up even if the level is negatively breached, he opined.