Indian stocks have given up most of their gains for the year, but there may be more pain ahead. That’s the view of Bank of America Merrill Lynch, whose 32,000 year-end target for the S&P BSE Sensex Index implies another 11% plunge from Wednesday’s close. That would put the gauge 2.5% away from a bear market – a 20% slide from its August 28 record.
Uncertainties related to oil prices and next year’s federal elections may “keep domestic sentiment and equity flows in check,” Bank of America Merrill Lynch strategists Sanjay Mookim and Nafeesa Gupta wrote in a report on Wednesday, maintaining a cautious stance on Indian equities.
The nation’s stock market has lost almost $300 billion of value since August, with concerns over defaults at private lenders adding to those over the impact of rising crude prices and a weakening rupee. It’s now worth only $1.97 trillion, falling below the $2 trillion for the first time since August 2017.
Credit Suisse Group AG also struck a cautious tone in a note on Wednesday, saying there’s too much confidence over the economic expansion and advising investors avoid shares of companies that may fall should the data disappoint.
“We worry that consensus GDP growth expectations are too optimistic as the import bill for the energy needed to drive that growth would turn out to be too high, given slow capital inflows,” Credit Suisse strategists Neelkanth Mishra and Prateek Singh wrote in a note on Wednesday.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
