Indian stock market’s outperformance relative to emerging markets (EMs) is likely to halt in 2022, said analysts at Morgan Stanley, according to a report in Business Standard.
In its note, the analyst said it expects the Sensex to hit the 70,000 mark by 2022-end – up around 17 per cent from the current levels.
Ridham Desai, head of India research and India equity strategist at Morgan Stanley in a co-authored report with Sheela Rathi and Nayant Parekh, said India’s strong growth and macro stability are driving its re-rating, albeit, for now, we think the outperformance could pause given strong trailing six-month relative performance (over 30ppt) to emerging markets. Relative valuations are at the high end of the historical range, and there appears to be exuberance among small- and mid-cap stocks.
Earlier some days back, the investment firm had downgraded India to equal-weight in their global emerging markets (GEMs) country portfolio.
Meanwhile, many other analysts feel that the equity markets would watch out for global cues in absence of any major event on the domestic front, and indices may face volatility because of the scheduled derivatives expiry this week.
Ajit Mishra, VP Research, Religare Broking
During the week, volatility is likely to remain high due to the scheduled derivatives expiry of November month contracts on November 25. At the same time, the focus would largely remain on the global markets for cues, in absence of any major event on the domestic front.
Yesha Shah, Head of Equity Research, Samco Securities
As the result season is through, D-Street will look for cues from international factors to decide its movement. In the absence of any positive triggers, indices are expected to remain under pressure as markets have been embracing a ‘sell on rise’ mood.
“As global macros will continue to dominate, investors should observe FII activity to weigh the sentiment and adopt a selective approach rather than venturing in any aggressive trades.”
During the holiday-truncated last week, the 30-share BSE benchmark tumbled 1,050.68 points or 1.73 per cent. Markets were closed on Friday on account of ‘Guru Nanak Jayanti’.
Vinod Nair, Head of Research at Geojit Financial Services
Going forward, rising inflationary pressure will continue to haunt global markets as fears of rate hikes will pump out liquidity from emerging markets like India.
Movement of the rupee, Brent crude and investment trend of foreign institutional investors would also be in focus.
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd
The overall market is in consolidation mode as valuations are rich despite good quarterly performance. Also, global cues are keeping markets volatile.
(With PTI Inputs)