After the Indian stock market continued to reach a new high, its collapsed financial report season is inhibiting the optimistic emotions of the Indian stock market, and the high valuation is facing doubts.
On Tuesday, July 30th, the Indian stock market closed, and the benchmark valuation was close to the historical high.
The analysis pointed out that investors choose to make a profit understanding when the benchmark index is approaching the historical high. To further rise in the Indian stock market, a strong financial report is required to provide motivation.
However, this financial report of Indian companies is not "awesome."
According to media statistics, more than 55%of the 29 companies that have announced their income so far, more than 55%are lower than the average expectations of analysts, which is significantly slowed down from the previous quarterSurat Investment. At that time, 62%of companies exceeded expectations.
And it is worth noting that more than 70%of the company’s sales exceeded expectations, indicating that the rising investment cost is beginning to squeeze profits.
Weak performance means that the rationality of the relatively high valuation of the Indian stock market cannot be confirmed.Data show that the Nifty Index is expected to have a price -earnings ratio of more than 20 times a year, which is 27%compared to the historical average.
In addition, technical indicators also issued bad signals.At present, 90%of the stock price of 90%of the Nifty 50 Index ingredients is at the level of the 200 -day mobile moving average, and in the past, this level often indicates the short -term trend.In addition, the relatively strong and weak index of the index is close to 80. The last level reached this level was a significant recovery before October 2021.
The Indian stock market’s NSE NIFTY 50 Index has rebounded 11%since June 4, but analysts are still cautious about the performance of the financial report season.
Citi Group predicts that the total net profit of the Nifty 50 Company in the second quarter will only increase by 2%compared with the same period last year, while Motilal Oswal Securities LTD. is expected to be 4%.In contrast, the growth of the previous quarter exceeded 11%, exceeding market expectations.
Analysis shows that some of the reasons for the slowdown in profit growth are due to severe heat waves, delayed election activities, and central banks’ restrictions on non -guaranteed loans.Geojit Financial Services LTD. Research Director Vinod Nair said:
"Due to the decline in demand forcing companies to take measures to increase sales, this may damage their profits and stock valuations. Indian companies’ profitability is facing pressure."Jaipur Wealth Management
However, despite the challenge, analysts still believe that the Indian stock market may surpass its Asian counterparts for the fourth consecutive year in 2024.
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