Stocks

Market outlook for 2018 by foreign brokerages

| Updated on January 08, 2018 Published on January 01, 2018

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Here is a compilation of foreign brokerages view on the Indian economy and the stock market for 2018.



India Outlook in 2018

View

Rationale

MARKET OUTLOOK





Bank of America Merill Lynch

Underweight

More bullish earnings/growth





Less bullish multiples





Increased global liquidity to hurt P/E

HSBC

Underweight

Unwinding of QE programme to increase volatility





Current strength of Asian economies could raise the risk of rate rises





Most Asian markets at all time highs





Valuations one standard deviation above historical average

Kotak Institutional Equities

Cautious

Strong earnings recovery in FY19 but valuations discount the same





Modest recovery in GDP growth (7.1 per cent in FY19)





Higher crude prices, weak GST revenues and unknown political outcomes add to risks





Risk of derating of multiples in sectors driven by policy, regulatory and technological changes

Nomura

Positive

Strong revival in corporate earnings





Stage set for a multi-year recovery





Positive macro and lower cost of capital





Strengthening of macro economic fundamentals

ECONOMIC OUTLOOK





Deutsche Bank

Positive

Economy poised for a cyclical upswing





GDP growth of 7.5 per cent in FY19 vs 6.6 per cent in FY18





Some pickup in private capex activity





Buoyant consumption growth





RBI to remain on an extended pause through 2018

Morgan Stanley

Positive

Full fledged recovery in 2018





Recovery in private capital spending-first time in six years

Goldman Sachs

Positive

GDP growth to accelrate to 8 per cent in FY19





Current activity indicator suggets signs of recovery





Activity growth to pick up in H12018





RBI to hike rates by 50 basis points in 2018

Credit Suisse

Negative

Growth to remain weak





Weak investment demand





Weak consumption demand due to low agricultural income





However equity market not expensive on a relative basis

Source: Reports

Compiled by Priya Kansara

Published on January 01, 2018

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