nifty outlook: Nifty to scale 20,000 in 12 months, says Goldman Sachs; remains overweight on banks

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Nifty is likely to touch 20,000 over the next 12 months, according to Goldman Sachs on the back of double-digit earnings growth in 2023-2024. The global investment banker’s target suggests a nearly 15% upside from current levels.

Goldman Sachs has further recommended buying Indian equities saying that it was “time to accumulate” quality stocks which are trading at reasonable price points.

“The valuation of the stocks is reasonable, though still not cheap. The relative premium to the region has halved from a record peak and the returns would be driven by 17%/15% earnings growth in 2023/24. Returns will likely be backloaded,” it added.

Goldman Sachs is ‘Overweight’ on banks and investment cyclical (industrials, cement).

Earlier, Morgan Stanley upgraded India to Equal-weight (EW) relying upon its resilient economy and narrowing valuation premiums. The US-headquartered investment bank and financial services company is ‘Overweight’ (OW) on China, South Korea and Taiwan.

“We upgrade India to EW given narrowing valuation premiums and a resilient economy. We stay OW North Asia ex. Japan and UW on ASEAN. We stay OW IT and add to Discretionary, but further reduce Asia/EM Financials weight (preferring the sector in India and Indonesia, where we are OW),” Morgan Stanley said in a report.

Morgan Stanley has reduced active risk to zero from (-)50 bps, earlier. The overall score stands at 22, according to this report. Chile is another country which has been given an Equal-weight rating by Morgan Stanley.India is placed at the seventh spot in terms of market allocation among APxJ/EM (Asia Pacific ex-Japan / Emerging Markets). Both India and Chile have been upgraded to Equal-weight.

Meanwhile, China is occupying the top spot followed by Korea, Taiwan, Mexico, UAE and Greece. All these countries have been given an Overweight rating by Morgan Stanley.

The report also highlights sectors on which it has a bullish, bearish and neutral view.

In the Indian context, Morgan Stanley is overweight on financial and consumer discretionary sectors and has upgraded the healthcare sector to Equal-weight.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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