Market strategists downbeat on Sensex for first time this year

BENGALURU: The outlook for domestic stocks for 2019 has been downgraded for the first time this year, according to a poll of strategists who expect the market to recoup its recent losses only once uncertainty around next year's elections fade, says Thomson Reuters website. Pressured by a steep sell-off in global equities along with dwindling credit supply, the main stock index, the BSE Sensex, has fallen about 10 per cent since hitting a life-high of 38,989.65 on August 29. October was its worst monthly decline since the financial crisis a decade ago.

With state elections slated over coming months and a general election scheduled for May, domestic shares could remain subdued until the results become clear, according to a November 13-26 poll of 50 strategists. "The political uncertainty plus the correction in global stocks can take the local market down in the short-term and once these concerns go away, we can expect it to recoup most of the losses," said CA Rudramurthy, managing director at Vachana Investments, according to Reuters.

Yet even by the middle of next year the BSE Sensex is forecast to regain only about half its recent losses to trade at 37,000 from Tuesday's close of 35,513.14. While it is expected to rise to a new record high of 39,400 by end of next year, thanks to strong corporate earnings, the strategists lowered 2019 predictions in the latest poll.