Stock Market News and Trend Of Nifty Analysis

gsgg.in An effort by Sebi Registered Research Analyst Gaurav Sharma(INH100008726)

Macro fundamentals improving, but risk-reward unfavourable: BNP Paribas

Macro fundamentals improving, but risk-reward unfavourable: BNP Paribas




Domestic macro fundamentals are improving, but slowing global demand and expensive valuations mean unfavourable risk-reward for equity investment, has said in a note.


“Defying global trends, has outperformed most peers year-to-date and is trading at 19.2 times (12-month forward price-to-earnings), 21 per cent above its long-term average, taking the earnings yield-bond yield gap below 2 per cent. Amid slowing global demand, lofty market valuations, a slowdown in retail flows and lack of positive catalyst for our earnings estimates, we remain cautious on the overall market returns in the near term,” said Kunal Vora, Head of India Equity Research, in a note.


The brokerage has an overweight (OW) stance on the banking sector thanks to “improving credit growth and stronger and cleaner balance sheets”. Also, the sector trades below its 10-year average P/E. IT and pharma are the other two OWs. On the other hand, it is underweight on auto, consumer staples and consumer durables, “where the valuation comfort after the recent run-up is low.”

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor





Source link