Nifty has achieved a new milestone by getting past the elusive five digit 10,000 mark. While this may seem phenomenal, Sunil Singhania, the Chief Investment Officer- Equities, in Reliance Mutual Fund believes that the markets are definitely not fairly valued at these levels. The market expert, in conversation with CNBC TV-18, said that investors should not view this as a euphoric top, as investors across the globe are waiting on the sidelines for a correction to happen. He believes that there will be correction would be short and swift. The market ace attributed the reason for the short and swift correction to there being more buyers in the market when there is a fall in value, than sellers when the markets are trading upwards.
Commenting on the difference between this new peak, and the previous milestone the CIO said that this milestone has come on the back of a lot of structural changes. “This time we are looking at structural changes, we believe that there is a structural low for oil. The 70- 80 billion savings from oil in India is a reality in India for years to come”, he said an an interview with CNBC TV-18. He believes that impact of GST is a structural positive. He went on to say, “The impact of more efficiency, more tax compliance, less corruption, increasing Make in India, whether it’s defense or electronics, a lot of these things are structural, and the benefits of these will be felt for years to come. In that respect this appears to be a different period.”
Earlier in May this year, the market ace had said that he sees a lot of over-exuberance in several mid-cap stocks. Reliance Mutual Fund is India’s third-largest asset holder, with assets under management (AUM) worth over Rs 2 lakh crore. He had also said that he sees a lot of froth building up in the the small cap segment. In year to date terms, the BSE small cap index is up by more than 33%, while the BSE Sensex at all time high levels has returned 21% in the year so far. How soon will the correction happen? Only time has the answer.