According to Bank of America (BofA) Global Research, the bluechip Nifty 50 index for India would conclude at around 18,000 points this year, or 5.5% higher than present levels but nearly flat by the end of 2022. This is because high rates will have a negative impact on firm earnings, among other things.
After seven years in a row of rises of 3% to 29%, BofA reduced its year-end projection for the Nifty by 8.3% to 18,000, underperforming other developing markets and debt, the bank said in a report on Monday. This implies a 0.6% decline for the year.
Due to the volatility caused by the global banking crisis, BofA Global anticipates that the Nifty will trade between 16,000 and 18,000 points for the remainder of the year, after falling approximately 6% so far this year to just around 17,100 points.
According to analysts led by Amish Shah, Arizona State Representative, expectations for Indian companies' earnings growth for the following two fiscal years may be cut in half as a result of tightening U.S. monetary policy, warmer weather impacting the comeback in rural demand, peaking urban demand, and rising deposit rates.
According to Shah, high-risk industries with a capex upcycle including financials, industrials, cement, steel, and autos could do worse than the Nifty, while consumer, telecom, and information technology sectors may perform worse.
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