In Wednesday’s trading session, Nifty 50 shares attracted investor interest following a downgrade by Goldman Sachs. The firm has adopted a cautious outlook on Indian stocks, reducing its rating to ‘Neutral’ amid concerns regarding growth.
Price Movement
On Wednesday morning, the Nifty 50 index opened modestly at 24,378.15 before climbing to an intra-day high of 24,604.25, up from its previous close of 24,472.10. The index has experienced volatility lately, having declined by 5 percent over the past month.
However, it has shown resilience in the long term, delivering over 10 percent growth over six months. Year-to-date, the index has risen by 12.72 percent and by 27.06 percent over the last 12 months, indicating strong investor interest.
What happened
Goldman Sachs has downgraded the Indian market to “neutral” from “overweight” and reduced its 12-month target for the Nifty 50 index to 27,000, down from 27,500. This new target suggests a potential upside of 9 percent from current levels.
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Goldman Sachs projects the Nifty 50 index at 24,500 in the next three months and 25,500 in six months. While the firm acknowledges the structural appeal of the Indian market, it notes a deceleration in economic growth and corporate profits.
High starting valuations and a less favourable backdrop may restrict near-term upside. The brokerage emphasises prioritising quality, earnings visibility, and targeted alpha strategies.
Indian Market Overview
Indian stocks facing significant selling pressure, are expected to encounter further challenges after Goldman Sachs downgraded them to ‘neutral’ from ‘overweight.’ This decision stems from slowing economic growth affecting corporate earnings.
Although the firm previously raised Indian equities to ‘overweight’ last year, disappointing earnings for the September quarter have prompted caution. Goldman Sachs noted that while the structural case for India remains positive, economic growth is cyclically slowing, impacting profits.
Goldman Sachs maintains an “overweight” rating on sectors such as Autos, Telecom, and Insurance. It has also upgraded its stance on Real Estate and Internet sectors to “overweight.”
About Nifty 50
The Nifty 50 Index is a prominent stock market index in India, representing the weighted average of 50 of the largest and most liquid companies listed on the National Stock Exchange (NSE). Launched on April 22, 1996, the index serves as a benchmark for the Indian equity market and is crucial for investors looking to gauge market performance.
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Written by – Siddesh S Raskar
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