Nomura: Nomura sets Nifty 2023 target at 19,030

Mumbai: Nomura has set a target of 19,030 on the Nifty for 2023 on the grounds that the recent outperformance of Indian stocks and high valuation limit the upside. The index target implies an upside of 3.3% from Thursday’s closing level of 18,414. The brokerage said the Nifty’s current valuations are above the pre-Covid levels and its valuation premium is at 70% as against the historical average of 40%.

Nomura’s top stock picks are

, , L&T, Hindustan Unilever, and Reliance Industries among others.

Nomura said Indian markets will be ‘relatively unstirred with negative rate/inflation surprise’ and will likely be ‘sensitive to the overall growth outlook’.

“Inflation has peaked, but could remain sticky. This would likely keep Fed hawkish prioritising inflation flight over growth slowdown,” said Nomura’s strategists Saion Mukherjee and Neelotpal Sahu in a note to clients. “The tightening monetary policy could drive major economies into recession and India’s growth will likely be adversely impacted from the global spillover.”

The US Federal Reserve on Wednesday hiked its policy rate by 50 basis points to 4.25-4.50%. Fed Chair Jerome Powell said more rate increases are in the offing next year.

“Economic slowdown, higher commodity prices and higher energy prices (geopolitics) are the key variables that present risks to corporate earnings,” said Nomura. “Slower domestic growth and/or higher commodity, oil prices present downside risk to current consensus earnings estimates.”