Nifty may hit 21,000 before any major correction; earnings, inflation extremely critical: Experts

Nifty may hit 21,000 before any major correction; earnings, inflation extremely critical: Experts

The Nifty 50 finally crossed the 18,000 milestone on October 11, driven by the flow of money from new-age and institutional investors despite global weakness and the risk of inflation due to increasing oil prices.

Going by the trend in several quarters, investors are buying on every dip, given the improving corporate earnings, economic growth and measures taken by the government and the Reserve Bank of India in the wake of the pandemic.

The availability of easy liquidity contributed to the momentum in equities across the globe although there is some volatility now on expectations the US Federal Reserve will start tapering asset purchases from next month. However, most experts said one should not be too worried about the Fed taper because India had robust foreign exchange reserves of $637.47 billion as of October 1.

They said Indian equities will be strong for at least the next 3-5 years following initiatives taken by the government since the outbreak of Covid-19, including Atmanirbhar Bharat schemes, production-linked incentives for various sectors, increased infrastructure spending and easing of rules and regulations to attract more foreign direct investment.

The Nifty 50 climbed to a record 18,041.95 on October 11.

“The resilience of the market in general and