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Muted returns ahead for Nifty in 2023? BofA Securities sets index target at 19,500 level

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BofA Securities has set Nifty 2023 target at 19,500 level, implying muted but positive returns. The foreign brokerage expects the 50-pack index to broadly stay in a range of 17,000-20,000 levels during the year, led by debate on two scenarios of a protracted global revival or a soft landing. India could underperform emerging markets but may outperform developed markets, it said.

“External facing IT/materials/energy/select autos (21 per cent of Nifty’s sales) & consumer discretionary with rich valuations could lead this fall; while domestic cyclicals & defensives could outperform. Overall, Nifty could trade at 17,000 level. We advise buying these dips as our analysis suggests Indian economic growth/markets falls lesser & recovers faster during global recessions,” it said.

BofA’s second scenario talked about soft landing. In such a case, Nifty could trade at 20,000, it said despite cut to Nifty FY24/25 earnings growth to 8 per cent/12 per cent. This scenario sees FIIs’ India positioning at a multi-year low.  In scenario 2, BofA sees IT, materials and cyclicals rallying and defensives underperforming.

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