Bernstein raises Nifty 50 target but highlights some long-term concerns; Details here

Résumé détaillé

Over the last 12 trading sessions, the Nifty 50 index has surged nearly 3,000 points from the October 28 low of 22,497, led by a combination of factors from lower oil prices, the midterms democrat sweep, unwinding of the AI trade, strong corporate earnings, and equally strong flows from Foreign Portfolio Investors (FPIs).

Global investment banking firm Bernstein remains optimistic of the near-term trajectory of the Indian stock market and has therefore, raised its year-end Nifty 50 target to 26,100 from its earlier revision of 25,000 on Wednesday, November 11.

However, over the next 12-month time horizon, the firm remains "neutral" on the Indian markets.

Over the last 12 trading sessions, the Nifty 50 index has surged nearly 3,000 points from the October 28 low of 22,497, led by a combination of factors from lower oil prices, the midterms democrat sweep, unwinding of the AI trade, strong corporate earnings, and equally strong flows from Foreign Portfolio Investors (FPIs).

"Our positive returns view in the near-term remains intact despite the recent market run-up, supported by receding crude, yields support and flows. We retain our trading buy - positive returns for the rest of the year view," Bernstein's note stated.

The firm alluded to India's strong earnings growth seen in the September quarter, with the Nifty 50 earnings growing 20% and the Midcap 100 results growing 14% so far, with an even stronger rebound seen in the Nifty Next 50 earnings.

However, Bernstein highlighted the pointers behind which the growth was built on - low base aided by tax-cut benefits and a temporary OMC profit rebound. "OMC under-recoveries remain, while weak tax collections and ballooning fertilizer subsidies paralyze government spending further," Bernstein wrote in its note. All of this causes the earnings to look better than the underlying economy, which we expect to weaken through H2 and beyond, Bernstein's note warned.

"For the markets, however, there is enough reason to take comfort," the note further added.

Bernstein also wrote about the clamour for revision to the LTCG tax regime, stating that in case something of this sort happens, it can temporarily freeze FII selling, but the long-term argument is far weaker.

"India is neither an AI beneficiary, nor an AI hedge, and massive global capital shifting…

Début de l'article, extrait de CNBC-TV18. Pour lire la suite, ouvrez l'article chez le média.