Stock market outlook: Expect no deep and prolonged correction; Nifty may see low-teen upside by March 2025: UBS
Also Read: Stock market crash: Why is Indian stock market down today? — explained with 5 major reasons In its monthly outlook report, the UBS analyst remains upbeat on India’s economic outlook, supported by better-than-expected momentum in domestic economic activities. However, geopolitical uncertainty could pose downside risks. Let us take a look at UBS outlook on Indian stock market, economy, fixed income securities and currency.
UBS believes the earnings growth outlook remains healthy. However, the focus could likely shift towards revenue growth as the tailwinds from margin expansion are largely behind. It expects the Nifty 50 to grow earnings at 12–13% in FY25.
“Amid global headwinds and ongoing general elections in India, we expect Indian equities to trade with a downward bias in the near term. However, we do not expect a deep and prolonged correction as the combination of resilient macro, healthy corporate earnings, and robust equity inflows should limit downside and offer buy-on-dip opportunities, in our view. We expect a low-teen upside for the Nifty index by March 2025," said Kamdar.
Also Read: Amit Shah predicts THIS for Indian stock market after Lok Sabha election results UBS is cautious on smallcap and midcap (SMID) companies due to rich valuations and downside earnings risk in a higher oil price scenario and prefers large-cap companies over small and midcaps companies given steep valuation differentials despite superior profitability and relatively lower sensitivity to higher oil prices. Kamdar recommends investors take profits in SMIDs and increase exposure to large-caps. “We currently prefer domestic-linked sectors (like autos, consumer durables, industrials/infrastructure, utilities, and real estate) as
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