Goldman Sachs sets Nifty target for 2024 at 21,800
What's the story
Goldman Sachs's Chief Asia Pacific strategist, Timothy Moe, has announced a 2024 target of 21,800 for India's Nifty50 index and upgraded the nation to an 'overweight' rating.
In a conversation with CNBC-TV18, Moe said that India has always had a strong investment case, boasting the best growth potential in terms of both economy and corporate earnings compared to all major markets.
Details
Valuation narrowing leads to upgrade
Moe shared that Goldman Sachs had downgraded India last year due to high valuations, but recent growth in corporate earnings and a drop in the PE ratio have made it more attractive.
He said, "Currently that still is on the expensive side but not as expensive and, accordingly, we think it gives us an opportunity to lean back into the long-term strategically positive stance."
What Next?
India stands out in long-term investment
When discussing Asia as an investment destination, Moe acknowledged the fierce competition from bond yields and global equity markets.
However, he remains confident that India will stand out in the long run, attracting foreign investments.
Moe emphasized the potential for Foreign Institutional Investors (FIIs) to increase their investments and the importance of domestic investors taking charge of their own markets.
Insights
Market themes and election impact
Goldman Sachs prefers banking over consumer-focused Non-Banking Financial Companies (NBFCs) and has identified three main investment themes.
These include short-term cyclical macro themes like large-cap laggards and midcaps; stable and quality growth at a reasonable price; and opportunities in the consumer sector.
Moe also noted that while markets can be volatile before elections, the upcoming general election's long-term impact on the markets should be minimal due to India's solid core fundamentals.