ETMarkets Diwali Survey: Brokerages bullish on India-centric sectors; global factors may haunt – Blue Barrows

New Delhi: Diwali is round the corner and most brokerage firms remain positive on the India Inc story. Scrapping the fears of recession and economic slow down, market participants expect Nifty50 to hit up to 21,000 in Samvat 2079.

Analysts participating in survey for Diwali 2022, remain positive on sectors related to infra and domestic consumption. Themes such as auto, financials, FMCG, consumer discretionary and healthcare are likely to do well.

On the contrary, they are wary of looming recession and geopolitical tensions. They remain skeptical over themes with international exposure like IT, metals, oil and gas, among others. US dollar’s strength would be another factor guiding the markets.

Here’s what experts from the Dalal street said about the potential outperformers and underperforming sectors for next diwali:

Deepak Jasani, Head of Retail Research, Securities

“Central banks’ monetary policies, geopolitical issues, inflationary trends, rural income growth momentum, economic growth momentum in India and globally,” he cited as the key drivers for the markets suggesting healthcare, FMCG, telecom and capital goods for the upcoming Samvat.

According to him, continued tight monetary policy, worsening geopolitical tensions, slow or negative growth globally and sub 5 per cent GDP growth in India may hinder the rally. He has picked metals, oil and gas and IT pack as laggards.

Siddhartha Khemka, Head Retail research,

“Domestic consumption, discretionary spending, credit growth, capacity expansion are the key factors to watch out for, whereas global economic slowdown, high interest rates and persistent inflation may supress the markets in the coming year.

Khemka is positive on sectors like BFSI, consumer discretionary, auto, retail, capital goods, real estate, hotels, footwear, QSR, defence and hospitals to name a few.

Vinod Nair, Head of Research,

Nair said that a resilient domestic economy, India developing as a manufacturing hub, FDI and FIIs, and drop in international commodity prices are the key triggers one should look at with a positive view on IT, pharma, FMCG, consumption, green energy and e-commerce.

“On the contrary, investors need to keep an eye on hyperinflation, global recession, hawkish monetary policy leading to rise in interest rates and Escalation in Russia-Ukraine war,” he added. Nair is negative on metals, oil, reality and infra.

S Ranganathan, Head of Research,

He said that apex revival, domestic consumption, formalization of the economy, digitisation, deleverage balance sheets and tax buoyancy are likely to guid the markets. He expects domestic oriented sectors and large Undervalued Banks to outperform.

“Global recessionary trends, geopolitical headwinds and rising inflation and interest rates may dent the markets, ” he added. “Companies with poor capital allocation will remain laggards.”

Amit Jain, Co-Founder, Ashika Global Family Office Services

“We are bullish on IT, banking and pharma. FMCG may be a laggard for us keeping the next one year time frame,” he said. “These stocks may be good drivers for the Indian markets going forward. Global credit and currency crisis can hold Nifty back.

Siddarth Bhamre, Research Head, Broking

Bhamre said that high growth driven by domestic consumption, industries functioning at 75 per cent capacity, falling crude oil prices are likely to guide the market. “India being most resilient in a very uncertain global environment,” he said.

On the contrary, global issues leading to a financial crisis which may impact India as well temporarily if not structurally, he responded citing auto, banking, cement, consumer durables, FMCG and IT among the performers tag, whereas metals and oil & gas may lack.

Tejas Jariwala, Research Head, Jainam Broking

PLI, National Logistic Policy, manufacturing activities, infrastructure and green energy themes to play for the coming year. “Manufacturing, tourism, and corporate lenders should perform well,” he added. “IT, auto, steel should be laggards.”

Vaibhav Agarwal, Head of Research at Basant Maheshwari Wealth Advisers

“We believe that the US Fed will have to cut interest rates in the next fiscal year and start the QE process again because if interest rates in US stay high for a long period, then the economy will collapse,” he said. “Global macros should become better, which should lead to a rally in our stock markets.”

The urban consumption play should do well whether it is in fashion retail, apparel or ethnic wear, said Agarwal. “IT services should do well with dollars expected to appreciate further, demand being robust and attrition coming down. Commodities as a sector may underperform.”

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)