It's not the first time that analysts across brokerage firms have reaffirmed their faith in Indian equity markets; however, what is more surprising is the fact that they see retail investors contributing in a big way going forward.
Benchmark indices have rallied over 26 per cent so far in the year 2014, fuelled by strong global liquidity and a reform push by the Modi government.
"I strongly believe that equity markets have a long way to go. It is true that we had a fast and quick run in the market and that made lot of investors cautious, especially the retail investors who are still avoiding the market because of their bad experience maybe five or six years ago. Also, because of very low valuation of companies during 2011 and 2012," says Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence India.
"This has created some kind of a fear element in the market for retail investors. Generally, they (retail investors) tend to avoid the market. In fact, FIIs have been the major participant of this bull run," he adds.
Veliyath strongly believes that the next leg of the bull run will be supported by domestic buying.
Experts feel the bull market in India still remains intact and investors with a long-term horizon should not worry too much about small corrections and keep adding quality stocks on every fall.
Rakesh Jhunjhunwala, partner, Rare Enterprise, is of the view that the bull run will last for the next two decades. "But of course there will be serious corrections," he says.
Equity contribution to domestic savings has been at its lowest at 0.5 per cent. It was around 10 per cent during the peak period of Harshad Mehta days and also in 2007.
"The reason for this is the big bear market from 2008 to 2013 which devastated retail investors. Now that the market has been acquiring higher peaks, we can see retail investors coming back gradually," says S K Goel, Director, Bonanza Portfolio Ltd.
Having learnt the lesson the hard way, retail money is likely to come through mutual funds which have seen a rise in inflows. Goel is of the view that we are likely to witness a rise in the retail flow into the market this year.
Equity mutual fund schemes have turned attractive with investors putting in a staggering Rs 34,000 crore in them during the first half of 2014-15, PTI said in a report last week.
As per the latest data available with the Association of Mutual Funds in India (AMFI), investors have pumped in a net amount of Rs 33,790 crore in equity-oriented MF schemes in the April-September period.
Given the fact that markets globally are looking weak largely on account of growth worries, there is always a possibility that there could be a 'time consolidation' in the market, which could carry on till about December or January, say experts.
Levels of 7700-7800 on the Nifty will act as a strong base for the index and most analysts do not see it drifting below that despite uncertain global set-up.
"I do not see too much of correction and 7800 will act as a good base. The indications are positive for India. Even if the global markets become soft, the market for them to invest in will be India, and India will continue to attract a lot of foreign investment," says Sudip Bandyopadhyay, President of Destimoney Securities Pvt Ltd.
"Domestic retail is also getting into the act. A couple of good IPOs and we could end up seeing a lot of retail investors coming back to the market," he adds.
Benchmark indices have rallied over 26 per cent so far in the year 2014, fuelled by strong global liquidity and a reform push by the Modi government.
"I strongly believe that equity markets have a long way to go. It is true that we had a fast and quick run in the market and that made lot of investors cautious, especially the retail investors who are still avoiding the market because of their bad experience maybe five or six years ago. Also, because of very low valuation of companies during 2011 and 2012," says Porinju Veliyath, MD & Portfolio Manager, Equity Intelligence India.
"This has created some kind of a fear element in the market for retail investors. Generally, they (retail investors) tend to avoid the market. In fact, FIIs have been the major participant of this bull run," he adds.
Veliyath strongly believes that the next leg of the bull run will be supported by domestic buying.
Experts feel the bull market in India still remains intact and investors with a long-term horizon should not worry too much about small corrections and keep adding quality stocks on every fall.
Rakesh Jhunjhunwala, partner, Rare Enterprise, is of the view that the bull run will last for the next two decades. "But of course there will be serious corrections," he says.
Equity contribution to domestic savings has been at its lowest at 0.5 per cent. It was around 10 per cent during the peak period of Harshad Mehta days and also in 2007.
"The reason for this is the big bear market from 2008 to 2013 which devastated retail investors. Now that the market has been acquiring higher peaks, we can see retail investors coming back gradually," says S K Goel, Director, Bonanza Portfolio Ltd.
Having learnt the lesson the hard way, retail money is likely to come through mutual funds which have seen a rise in inflows. Goel is of the view that we are likely to witness a rise in the retail flow into the market this year.
Equity mutual fund schemes have turned attractive with investors putting in a staggering Rs 34,000 crore in them during the first half of 2014-15, PTI said in a report last week.
As per the latest data available with the Association of Mutual Funds in India (AMFI), investors have pumped in a net amount of Rs 33,790 crore in equity-oriented MF schemes in the April-September period.
Given the fact that markets globally are looking weak largely on account of growth worries, there is always a possibility that there could be a 'time consolidation' in the market, which could carry on till about December or January, say experts.
Levels of 7700-7800 on the Nifty will act as a strong base for the index and most analysts do not see it drifting below that despite uncertain global set-up.
"I do not see too much of correction and 7800 will act as a good base. The indications are positive for India. Even if the global markets become soft, the market for them to invest in will be India, and India will continue to attract a lot of foreign investment," says Sudip Bandyopadhyay, President of Destimoney Securities Pvt Ltd.
"Domestic retail is also getting into the act. A couple of good IPOs and we could end up seeing a lot of retail investors coming back to the market," he adds.
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