The domestic equity benchmark index Nifty 50 is expected to give moderate returns in the year 2024, says Emkay Global Financial Services and has a year-end target of 24,000 for the index.
It expects smallcap and midcap stocks (SMIDs) to outperform and, in general, it prefers Manufacturing to Services. It expects non-linear returns in a dad-bod shape: a muted Q1 and Q4, with the returns being concentrated in April - September, coinciding with the election results, the full Budget in July, and rate cuts in the USA and India.
The brokerage firm has adjusted its model portfolio to reflect the post-earnings changes and some market trends.
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“Our overall stance remains biased towards Manufacturing, and we keep our Underweight call on Financials intact for now. We are staying with most of our winners – Zomato/ Delhivery/ Motherson Sumi, as we still see an upside from current levels. From the PSU space, we add SBI and ONGC, where we still see value and potential trigger,” Emkay Global said.
Emkay’s Underweight (UW) stance on staples is enhanced with an increase in Industrials, in line with the ITC-to-Indigo shift. The rest of its sector exposures are intact.
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“Apart from staples, we are Underweight on BFSI, as we see long-term EPS growth and ROE challenges – the current liquidity tightness aids our position. We are Overweight (OW) on Materials and Consumer Discretionary (expressed largely through autos/ancillaries), to help us play the manufacturing and capex themes,” said the brokerage house.
It is also Underweight on the IT sector, as it believes that entry valuations should be better for long-term outperformance.
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