Goldman Sachs bullish on Indian equities

INDIA'S Nifty 50 index was likely to gain almost seven per cent in the next twelve months and hit a high of 20,700 by June 2024 on the back of strong corporate earnings, analysts at Goldman Sachs said on Wednesday (5).

"We think India is the best structural growth story in the (Asia) region. Macro vulnerability appears low, activity data and earnings trends have been improving," said Goldman strategists led by Sunil Koul.

"The equity market has a strong track record of monetizing the economic backdrop."

India has been the top performing market in Asia in the second quarter in dollar terms, Goldman said.

The Nifty 50 rose 1.1 per cent last quarter, compared with a 0.7 per cent rise for China's blue-chips index CSI300 and hit a fresh record high of 19,434.15 earlier this week.

However, Goldman also expects consolidation in Indian equities in the third quarter on a lack of immediate upside following the index's recent rally.

That was likely to be followed by a pick-up in the subsequent quarter heading into the festive season to eventually hit 20,700 by June 2024 driven by earnings growth in the mid-teens, Goldman said.

The benchmark index has already jumped more than seven per cent so far this year, compared with a 3.6 per cent rise in MSCI's index of Asian shares excluding Japan. It closed at 19497.30 points on Thursday (6).

(Reuters)