Nifty could hit 24,000 by year-end on monetary easing, FPI inflows, says Emkay Global
Emkay Global Financial Services, said, “With index setting at long-term mean valuations, we expect 11% return for the Nifty in 2024. The current composition of the Nifty is predominantly defensive. The India story is largely a capex-driven, industrials-led earnings bounce-back.
The Nifty, on the other hand, is largely driven by consumption and, to some extent, tech." Additionally, small and mid-cap companies (SMIDs) are poised to outperform, riding the wave of robust earnings growth and improving return ratios, it further added. The forecast suggested that the US Federal Reserve is anticipated to initiate easing in the third quarter of CY2024, implementing measured cuts, and the Reserve Bank of India (RBI) is expected to swiftly follow suit. This is anticipated to boost valuations in growth stocks, particularly in sectors like manufacturing and select premium consumer categories, which are experiencing macroeconomic tailwinds.
“There is growing divergence between Nifty and NSE500 weights. So, while the economy and broader markets would still rule at high valuations in Dec-24, such optimism may not reflect in the broader Nifty. Manufacturing and infrastructure are expected to gain prominence as prime themes in the year 2024," Sen added.
Meanwhile, equity inflows for FY25 will surpass the USD 36.7 billion observed in FY21. This optimism is based on the larger market-cap base, which has enhanced India's absorptive capabilities, and the country's potential to attract a larger share of risk-off emerging market flows, stimulated by the Fed's rate cuts, considering China's challenges in attracting such flows, according to the Emkay Institutional Equities report. Nirav Sheth, CEO- Institutional Equities, Emkay Global Financial
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