What portion of your salary should you spend on loan EMIs?
Most people buy a house or a car by taking a loan from the bank, but do you know what is the maximum portion of your salary that you should spend on EMI? What is the 40 percent EMI rule? What are the disadvantages of spending more on EMIs? Among home loan, personal loan, auto loan and credit card bills, which loan should you eliminate first?
Analysts on Dalal Street see up to 15% upside in the domestic equity market in the new financial year starting from April 1, 2021. The benchmark equity indices rallied around 70% in 2020-21 due to the liquidity measures taken by the central bank and government amid sustained inflows by foreign institutional investors.
Gaurav Dua, SVP, Head-Capital Market Strategy, Sharekhan by BNP Paribas said, “We see scope for 12-15% returns in Sensex and Nifty in the next fiscal driven largely by the expected surge in corporate earnings over the next two years.”
Sectorwise, the BSE Metal index rallied the most 150% during the year due to an increase in commodity prices in the global market. The BSE IT, Auto, Realty, Capital Goods TECk, Power, Healthcare, Bankex and Consumer Durables indices advanced between 65%-110% during the year.
Considering the present market scenario, Gaurav Garg, Head of Research, CapitalVia Global Research said, “The metal sector can be expected to be in the limelight for the upcoming year with rising demand. The next sector to focus on is infra. Expectations of recovery in economic demand in FY22 and increased Capex outlined in the Union budget is also set to boost the sector. Another sector which one must be looking forward to is the renewable energy sector. The renewable energy capacity additions are expected to reduce India’s dependence on Thermal power to 50% by FY 22. With a CAGR of 8.6% over the period of FY 12-19, this space may provide good opportunities.”
The 30-share index BSE Sensex advanced 20,251 points to 49,719 till March 31 (at around 1 pm (IST)) from 29,468.49 on March 31 last year. On the other hand, the 50-share Nifty index gained over 6,100 points to 14,763 during the same period.
Commenting on the next financial year, Rusmik Oza, Executive Vice President, Head of Fundamental Research, Kotak Securities said, “Outlook for the market in FY22 looks promising with higher returns coming closer to the end of the fiscal year. In the immediate future Indian markets could go in for some correction and consolidation phase but as time goes by it could recoup and standout. India’s stable currency and bond yields could help attract higher FPI flows in comparison to other emerging markets.”
He further added that investors would start discounting FY23 earnings by the end of FY22. “We can expect Nifty50 to end FY22 somewhere around 15,500 levels, while Sensex can settle around 55,000,” said Oza.