Global brokerage Goldman Sachs in its latest strategy note recommended investors to 'buy the weakness' after the Indian stock market saw a steep fall tracking Lok Sabha election results, which failed to match the expectations of Dalal Street.
The foreign brokerage expects mid term 12-month returns and predicts the stock market index Nifty to reach 26,000 by the end of June 2025.
Though the BJP-led National Democratic Alliance failed to win a large majority as predicted, Goldman Sachs said that India's macro stability and growth story remain intact.
The brokerage expects foreign flows to return to India, given this event risk is behind now, especially in the light of weak flows so far this year and multi-year low foreign positioning.
Interestingly, Goldman Sachs stays 'Overweight' on the Indian market, continuing to favour domestic sectors like autos, industrials, telcos and insurance.
The brokerage has upgraded staples from 'Underweight' to 'Neutral' on likely rural support but lowered utilities to 'Neutral', citing rich valuations.
Further, Goldman Sachs said that small and midcap stocks remain vulnerable given their high valuations and increasing regulatory scrutiny.
Prime Minister Narendra Modi will return for a third term, though the BJP-led NDA coalition fell short of expectations in the face of a surprisingly strong showing by the Opposition — INDIA bloc.
The NDA managed to secure 292 seats, with the result on one seat still pending. INDIA bloc have together won 233 seats -- 39 short of the majority mark.
The foreign brokerage expects mid term 12-month returns and predicts the stock market index Nifty to reach 26,000 by the end of June 2025.
Though the BJP-led National Democratic Alliance failed to win a large majority as predicted, Goldman Sachs said that India's macro stability and growth story remain intact.
The brokerage expects foreign flows to return to India, given this event risk is behind now, especially in the light of weak flows so far this year and multi-year low foreign positioning.
It said that valuations are not expensive at 22 times price-to-earnings. The broking firm expects strong earnings delivery to drive market returns, and is estimating 15% earnings CAGR in the financial year 2024-2025.
Interestingly, Goldman Sachs stays 'Overweight' on the Indian market, continuing to favour domestic sectors like autos, industrials, telcos and insurance.
The brokerage has upgraded staples from 'Underweight' to 'Neutral' on likely rural support but lowered utilities to 'Neutral', citing rich valuations.
Further, Goldman Sachs said that small and midcap stocks remain vulnerable given their high valuations and increasing regulatory scrutiny.
Prime Minister Narendra Modi will return for a third term, though the BJP-led NDA coalition fell short of expectations in the face of a surprisingly strong showing by the Opposition — INDIA bloc.
The NDA managed to secure 292 seats, with the result on one seat still pending. INDIA bloc have together won 233 seats -- 39 short of the majority mark.
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First Published: Jun 5, 2024 9:31 AM IST
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