Goldman sees Nifty scaling 7,000-mark by December
Mumbai: Financial major Goldman Sachs Monday said it expects the NSE Nifty index to cross the 7,000-mark by the end of the year.
In a note dated January 4, the American company said: "Given the inexpensive valuations and conservative investor positioning, we are overweight on India, China, Korea and Singapore, and tilted towards cyclicals."
It sees Nifty rallying 17 percent in the year to cross 7,000 points (from 5,993 points on January 3), or a price-earnings multiple touching 14.5 times.
The 50-share National Stock Exchange index Nifty lost 27.75 points, or 0.46 percent, to end at 5,988.40 Monday.
Goldman's Asia-Pacific Outlook Report said Korean stocks will have the highest return in the year with a likely gain of 18 percent. After Indian stocks at second rank (Nifty) with 17 percent gain, Chinese stocks will be at the third position with 15 percent rise, followed by Singapore at 12 percent.
Goldman has included Bajaj Auto and Tata Steel in Asia-Pacific "growth recovery" group of stocks that have favourable growth and valuations. The company also sees tech giant Infosys as a stock with a potential "catch-up" opportunity after lagging in 2012.
The report also lists Tata Motors, Sterlite and Hindalco as stocks with favourable macro exposure and attractive profiles.
The watchwords for 2013 are 'growth recovery' and accordingly Asian regional economic growth should improve to 6.9 percent from 6.2 percent in 2012, and corporate earnings growth should accelerate to 13 percent and 14 percent in 2013/14 after two years of stagnation, it said.
Domestic markets rallied close to 28 percent in 2012, after a disastrous 2011 when the both the benchmarks tanked over 25 percent.
On the global front, the report said, "In the five weeks since we published our 2013 views, US has reached a fiscal compromise, China's growth and policy outlook has firmed, and our marketing feedback shows investors to be under-risked relative to their views."
"We increase our sectoral growth tilt by raising autos and capital goods, and reducing telecoms." The report said 2014 should see a further pick up in regional growth to 7.4 percent.
The main drivers of this outlook are a stabilisation and then improvement in developed markets growth; a recovery in Asian domestic demand facilitated by accommodative fiscal and monetary policy; and stable-to-softer energy prices, said the Goldman Sachs report.