ETMarkets Smart Talk: Energy, auto, metal, defence, cement could be sectors which could hog limelight in G20: Nitin Rao

economictimes.indiatimes.com:

“While there could be multiple sectors that would benefit from this event, the broader themes that would hog limelight could be the energy sector, power sector, automobiles, cement, commodities such as metals, space/defence to name a few,” says Nitin Rao, CEO, InCred Wealth.

In an interview with ETMarkets, Rao said: “The focus on switching to clean energy/decarbonization / moving away from fossil fuels, exhibits a lot of opportunities for companies operating in the oil & gas/energy sector” Edited excerpts:

The market seems to be finding some resistance at higher levels – what is your take on markets at current?
After a significant rally from March 2023 lows, markets peaked around 20th July this year close to 20,000 on the Nifty 50 index. After almost a 1.5-year period, markets broke out of the 17800 – 18700 range that it had been trading in since October 2021.

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However, hawkishness from global central bankers, sticky headline inflation, and the US rating downgrade were a few key reasons for sentiment turning weak.

Markets have since retraced by a little over 3.5% from the peak. If you look at the table below, compared to Oct-2021 peak, Nifty 50 has delivered price returns of 4.25% (2.25% CAGR) while the forward P/E for the Index has de-rated by ~23% (13% annualized)!

This has primarily been due to corporate earnings showing strong growth and also expected to track 14% — 15% CAGR over the next 2 years.

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