Stock Market

Strong momentum, liquidity may take Nifty higher: Udayan Mukherjee

Mar 20, 2017 11:07 AM IST | Source: CNBC-TV18

Feels that FIIs waited for key events to pan out for the market and their current investment of USD 2 billion in a week was a serious commitment. But, for an investor, the situation looks a little murky as the market has seen no earnings growth for the past few years.

Even as Indian equities have witnessed a strong share rally, local stocks are not the only ones partying.

In an interview with CNBC-TV18, veteran financial commentator Udayan Mukherjee says other stock markets such as Hong Kong and Russia have performed better.

But he added that Nifty could move higher from this point as momentum and liquidity is strong.

“FIIs are late to the party as they were waiting for events such as elections and Fed actions to pan out,” he said. “Furthermore, the USD 2 billion investment by FIIs in a week was a sign of serious commitment.”

For an investor, the situation is a little murky with no earnings growth for the market in the last three years. “It is important to look at trailing earnings growth as well,” he said. “It would take a lot of courage to buy stocks from investment prospective.”

On the newly-announced merger between Idea Cellular and Vodafone, he said that the Idea stock may move close to the near term arbitrage between current market price and the deal price. “Going forward, you will have to take a business call based on earnings prospects,” he said but added that the sector will witness a “slugfest” thanks to Reliance Jio’s tariff war.

“Expect more bloodletting between players. That usually does not create shareholder value,” he said.

Interview transcript to follow.