Nifty Outlook: After the strength of 23 per cent in 2021 last year, the domestic benchmark index Nifty 50’s growth may stop this year.
Nifty Outlook: After the strength of 23 per cent in 2021 last year, the domestic benchmark index Nifty 50’s growth may stop this year. According to analysts at global brokerage and research firm UBS AG, the valuation of the domestic market is still very high and it is not fully reflecting the upside conditions. Last year, the Indian stock market performed better than the markets of developing and developed countries around the world. Nifty is currently close to 17700 and Sensex is above 59400, which are about 5 percent below the record high level of 2021 last year. Talking about individual stocks, UBS AG has expressed confidence in financial stocks.
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Nifty may slip due to these reasons
UBS AG analyst Hartmut Isse has written in his note that Nifty is at very high valuations, due to which it may decline. Apart from this, UBS AG has also expressed the possibility of slippage in Nifty due to investment trend in the domestic stock market. The reason for the rally in the domestic stock market was domestic retail investors rather than foreign portfolio investors who can withdraw their money if they do not get better returns from the market or the bank raises the deposit rate. In both these situations, domestic retail investors can withdraw their money, which can cause the market to slip. According to the estimates of UBS AG, there may be slippery in Nifty but there is no possibility of a sharp fall.
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expressed confidence in these shares
In the last six months, the performance of Bank Nifty Index has been weaker than Nifty 50. In the last 6 months, Nifty has strengthened by 11 per cent while Nifty Bank is only 4 per cent. According to the report of UBS AG, there may be a growth of 10 percent in the loan book, due to which banks and non-banks can pick up. Apart from this, due to increase in interest rates, the net interest margin will also increase. Analysts say private banks like Axis Bank, HDFC Bank and ICICI Bank may outperform their peers. Apart from this, if we talk about PSU banks, then the upcoming elections may have a negative impact on them but it will be temporary.
UBS AG has listed Axis Bank, Bank of Baroda, HDFC Bank, ICICI Bank, ICICI Lombard General Insurance, L&T Finance, Mahindra & Mahindra Financial in the Preferred Stock list while Kotak Mahindra Bank is the only major private bank to be recognized by UBS. Placed in the list of least preferred stock.
(Article: Kshitij Bhargava)
(The stock recommendations given in the story are from the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.
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