Nomura's equity strategist says Indian stock markets have not yet seen a significant correction and given the macroeconomic data, there is still a risk of a sharp decline, which could be as much as 5 to 12 per cent.
Sion Mukherjee, head of India equity research at Nomura, said the markets were going through the current tense situation due to macro factors. There are still potential risks in the market. We estimate that a major impact on growth and earnings has not yet been seen. The market should fall at least five times from its current level, and this correction could be even greater if concerns about growth and earnings are taken into account. Depending on the growth-growth outlook, the markets could see a further correction of 5 to 12 per cent. Nomura's research huddle further says that the earnings of Indian companies have been satisfactory, the concern is economic growth and interest rates. Global events since the beginning of the year have raised concerns.
Nomura believes that domestic markets have corrected 10 per cent since its October 2021, while India is still an outperformer since the onset of the Kovid-12 epidemic. Mukherjee further said that Nomura's December 203 target for Nifty 50 is 16,200, which is 12 times the one-year forward earning. So that there is minimal scope for an increase in the benchmark index. With foreign portfolio investors-FPIs remaining volatile, domestic investment flows have been seen to be in balance. Along with this the broking house for the industrial and infrastructure industry is bullish.
