When will Sensex hit 1 lakh? What Mark Mobius has to say after Modi-led NDA’s less than predicted Lok Sabha win

| TOI Business Desk | TIMESOFINDIA.COM | Jun 6, 2024, 13:06 IST

Mark Mobius, when asked about his earlier prediction of the Sense... Read More

Mark Mobius, the billionaire investor, remains confident about the Indian stock market's potential to reach new heights, despite a weaker mandate for the Narendra Modi-led NDA in Lok Sabha election results 2024.

In an interview with ET, Mobius, when asked about his earlier prediction of the Sensex hitting the 1 lakh mark within the next five years, affirmed his stance, saying that the market is still on an upward trajectory despite occasional corrections. Mobius even suggestd that this milestone could be achieved sooner than initially anticipated, considering India's exceptional growth.

“We are still on that upward trajectory. There will always be corrections, but we are still in that direction. We will hit that (1 lakh mark for Sensex). Maybe even before five years. India may be an exception in terms of moving faster,” Mobius said.

Mobius also clarified that the current market situation is merely a pause in the ongoing bull run and not its end. He explained that generally, if a country's economy is growing at a rate of 7%, as India is currently experiencing, the market and earnings of well-performing companies can be expected to increase at double that rate, around 14-15%. Based on this principle, he projects that the market index will continue to rise at this pace over the next decade.

Also Read | Why Raamdeo Agarwal believes Indian markets will double in next 5-6 years despite Modi-led NDA's less than predicted mandate

Mobius said that despite the current political turmoil in India, certain sectors will continue to thrive. He identified the software and technology sectors as being particularly resilient, including companies involved in computer hardware, semiconductors, and software development. While there may be some impact on the consumer side, Mobius suggested that the rapid growth of the Indian economy will help these companies perform relatively well.

Regarding the potential impact on PSUs, given Prime Minister Narendra Modi's strong support for these entities, Mobius expressed concern, stating, "Yes, I think that they will be hit and not only those but others will be hit as well as a result of the change in policies. You have seen some of the big infrastructure companies come down pretty dramatically because there is a fear that maybe infrastructure will be slowing down, the construction of roads, bridges, etc, will slow down, so that is unfortunate, but it remains to be seen."

Mobius emphasized the need to wait and observe the decisions and actions taken by the new government before drawing any definitive conclusions about the future of PSUs and the overall market direction.

Also Read | When will BSE Sensex, Nifty50 resume their long-standing upward trend?

When asked if he believes the market reached its lowest point on the day of the election results, Mobius responded, "Yes, it looks like. It may have bottomed out. But I think you have got to be cautious about that. It remains to be seen how the political situation turns out and what kind of policies will be followed by the new conglomerate of powers that take place."

On the possibility of foreign institutional investors (FIIs) de-rating India in the near term, Mobius expressed confidence that this is unlikely to happen. He argued that FIIs recognize India's potential and are keen to diversify their investments away from China. “...nevertheless, India is going to benefit from the desire of FIIs to diversify and that is very important,” he said.

Top 10 Largest Economies In The World

Top 10 Largest Economies In The World: India is all set to become the world’s third largest economy in the coming few years. But what is India’s current ranking in the world’s top 10 economies by nominal GDP size? Where do America and China stand? Did you know that at the current level, the USA's GDP is 7 times that of India? As per the latest IMF data sourced from EY, we take a look the world’s top 10 economies and their projected GDP in the coming years: (AI image)

The United States of America or the USA leads the list of top 10 largest economies in terms of nominal GDP for the year 2023 as per IMF’s estimates. The GDP for 2023 stands at $27,357.825 billion and the expected GDP for 2024 is at $28,781.083 billion. The IMF outlook till 2029 predicts that America will continue to be the world’s largest economy, with an expected GDP of $34,950.012 billion. (AI image)

As of 2023, China’s GDP according to IMF estimates stands at $17,662.041 billion. In 2024, China’s GDP is expected to rise to $18,532.633 billion in 2024, moving to $24,842.337 billion in 2029. China is likely to maintain the tag of the world’s second largest economy. (AI image)

Germany stands at the third rank in the list of world’s largest economies with a GDP of $4,457.366 billion in 2023. In 2024, Germany’s GDP Is likely to be around $4,591.1 billion and in 2029 it will likely be near $5,358.074 billion. According to IMF estimates, Germany would lose the tag of the world’s third largest economy 2027 to India. (AI image)

Japan is the world’s fourth largest economy with a GDP of $4,212.944 billion in 2023. Japan’s nominal GDP has been declining for the last few years and by 2025 it is likely to lose the spot of the 4th largest economy to India. In 2029, Japan’s GDP is expected to be around $4,944.744 billion. (AI image)

India is the fifth largest economy in the world with a GDP of $3,572.078 billion in 2023 according to the latest IMF data. In 2024, India’s GDP is expected to be $3,937.011 billion and in 2025 it will likely become the fourth largest economy with a GDP of $4,339.83 billion. IMF estimates predict that in 2027, India will beat Germany to become the third largest world economy with a GDP of $5,287.04 billion. By 2029, India’s GDP is expected to be around $6,436.653 billion. (AI image)

The United Kingdom or UK, with a GDP of $3,344.744 billion in 2023, is the sixth largest economy in the world. In 2024, its GDP is expected to be near $3495.261 billion and by 2029 the nominal GDP would be around $4661.463 billion, according to IMF projections. (AI image)

France is the world’s seventh largest economy with a GDP of $3,031.778 billion in 2023. Its nominal GDP is expected to grow to $3,130.014 billion in 2024 and reach $3,645.286 billion by 2029, predicts the IMF. (AI image)

With a GDP of $2,255.503 billion, Italy is the 8th largest economy in the world as per IMF’s 2023 data. Italy’s economy is expected to reach a size of $2,328.028 billion in 2024 and $2,625.878 billion by 2029. According to IMF estimates, in 2024 Italy will slip a level in rankings to 9th spot with Brazil moving up. (AI image)

Brazil is currently the world’s ninth largest economy with a nominal GDP of $2,173.671 billion in 2023. In 2024, it is expected to become the 8th largest economy with a GDP of $2,331.391 billion, leaving behind Italy. By 2029, it will likely have a GDP of $3,058.227 billion. (AI image)

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