Nifty may top out at 5000, book profits: Analysts

The run of the bulls continues on Dalal Street. Even as the Nifty nears the 5,000 mark after close to 16 months, the debate over liquidity, valuations and market momentum at these levels gets more vocal. Is a Nifty at 5,000 a little too-overvalued given visibility over corporate earnings is still not very clear? Is a correction overdue or will the burst of fund inflow to emerging markets like India give it further momentum?

C Jayaram, ED of Kotak Mahindra Bank, feels valuations are getting stretched and the Nifty may not have more momentum to continue its rally. As the market rallies further, the liquidity argument gets weaker, he told CNBC-TV18 in an interview. “For my money, we have pretty much reached close to the end of the road,” Jayaram said.

Jayaram said that even as companies’ earnings had improved in the previous quarter, it was more a result of the cost-cutting they exercised. He added that markets would be at current levels even by December due to a lack of any major positive news triggers. “Also, I cannot see any big negative surprise as well because in case there is correction there is enough buying interest at levels about 10% lower than this.”

Source: Moneycontrol