Earnings downgrades likely; Nifty staring at 8,000: Ajay Bagga

In a chat with ET Now,market expert Ajay Bagga shares his view on what is in the store for the market ahead.


ET Now: Irrespective of what happens to headline Nifty levels, a bunch of stocks are behaving as if the index is at 7,500. Bosch is quoting at around Rs 21,800, Symphony is at Rs 2,200. A lot of high-flying stocks have corrected quite viciously. What do you think is in store in the near term?


Ajay Bagga: Yes, many big companies have lost about four-five months of growth. They are back to November-December kind of numbers. So, a time-wise correction is likely, given that there are big catalysts to propel the market higher.

With the FII investment being murky, fundamentally, it leads to a situation where you can expect the market to go down. Therefore. I really believe that investors, for the first time, have started talking about 8,000 levels on Nifty.

I have been saying that for the last two months that probably 8,000 on Nifty is imminent. There are a number of factors working against the market; I would just add disappointing earnings to the list. The market will see earnings downgrades for the next one year. In the next six months, you would not see any major recovery.

You have seen a couple of financial results, which suggets no capex recovery. Working capital loans are increasing and some brownfield term loans are coming in, but that is it. Nothing is happening on the ground. The private sector will not be in a rush to really put in new capacity, which is going to constraint earnings.