Goldman Sachs has raised its target for Nifty to 23,500 in 2024. The global investment firm expects India's benchmark indices to perform on the back of favorable macro environment.
In a note, the analysts of the firm noted that the last two months have seen a shift in global environment. They said, "The global macro environment has shifted more favorably in the past two months, with expectations of firmer US growth, earlier Fed and Asia easing cycles and modest dollar depreciation."
Despite headwinds, Indian markets closed a strong 2023 on the back of robust domestic growth and exuberance of retail investors. Since the expectations of policy continuity post 2024 elections after the results of state elections, markets have rallied strongly.
The changing environment has prompted Goldman Sachs to raise its target from the earlier 21,800 it set in November. The analysts wrote, "While markets have partly priced this, a better growth/rate mix recently led us to raise our NIFTY index target, incorporating a higher ‘target’ valuation multiple. We now expect NIFTY to reach 23,500 by end-2024, which implies 9% INR price/12% USD total returns for 2024, led by mid-teen earnings."
The firm is betting on the performance of large caps over mid and small caps this year. "We retain our preference for domestic over external sectors," it added.
Both equity and debt markets of India are becoming a favourite of global investors. On Monday, Bloomberg proposed the inclusion of Indian government bonds to its global index, just months after JPMorgan announced the inclusion of Indian gilts in its index.
Indian equity markets also closed 2023 after attracting over Rs 1 lakh crore investment from foreign institutional investors.