Among other brokerages, Jefferies is also cautious on Indian stocks for 2023, as high valuations have created doubts about their continued outperformance against global equities. The brokerage also added that its asset allocation for India will remain 'modestly bullish' since the domestic economy is resilient and coporate earnings are strong.
According to Jefferies Nifty 50 could stay in the 17000-19500 range in 2023, and any correcttion is an opportunity to buy. The brokerage has also mentioned large banks, automobiles, staples, and property as sectors to watch out for while investing.
Jefferies isn't first as Morgan Stanley and HDFC Securities had also expressed concern about hefty valuations of Indian stocks to indicate thatit could limit the returns from equities in 2023.
It cited the slowdown of domestic inflows to Indian markets, as a cushion for the market against the outflows from foreign institutional investors. Jefferies also expressed positivity about China and Hong Kong, in comparison to India.
On the other hand, Jefferies was bullish on housing demand, as affordability for homebuyers was stronger despite high mortgage rates. This happened during the pandemic, and lack of inventory along with possibilities of capital appreciation also supported demand.
The brokerage added that, prices will rise further in 2023 and construction costs will drop to increase margins and liquidity for real estate companies. Growth in joint development agreement and land purchases will also be faster for the coming year.
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