India shares well positioned, but returns to moderate; Nifty Target on 26,500: Sanjay Mookim

Sanjay Mookim, head of research at JPMorgan, believes that the stock market of India will remain a strong bet in the long term despite global headwinds, modest economic growth and foreign outflow. Speaking with ET now, Mookim outlined his prospects for sector all locations, secondary market flows and the potential trajectory of Nifty for the current tax.

Moderate growth, reasonable return

Mookim warned investors to temper expectations, and emphasized that nominal GDP growth has been delayed from more than 20% in FY23 to around 8% currently, with only a gradual pick -up expected in the coming years. “If I make 9% in shares in an index ETF, I should be happy with it. It is a good return,” he said, and noted that a high double-digit compound returns may not be realistic in the next three years.

For short -term investors, he added, the return will depend less on growth and more the surprises of profit, which remain difficult to meet in view of the current economic background.

Sector preferences: financial data, consumption, real estate, power, defense

About the allocation of sector, Mookim expressed confidence in financial data and discretionary consumers, who quoted attractive ratings compared to global peers. He also emphasized opportunities in real estate, power and defense shares and described them as quirky plays with long-term growth potential.

“Finance and consumer names are the most logical as core ownership. Furthermore, real estate and power remain promising areas,” he said.

IPO’s absorbent liquidity, secondary market still relevant

Tackling ensuring that IPOs and block offers absorbed the liquidity of the market, Mookim argued that this was part of the natural function of the stock market. “The position of the stock market is to take savings and provide it to companies that will use those savings to grow assets. As long as there is money, there will be a demand,” he said. He has also rejected the idea of ​​focusing too much on FII current data. “Every day the net streams are zero. Markets move based on the boost or seller’s impulse. We cannot invest in expectations, but must concentrate on Fundamentals,” he added.

Wider coverage, deeper market participation

Mookim emphasized how the stock market in India has been structurally deepened in recent years. The trade volumes are today extended from $ 3 billion a day in 2019 to $ 12 billion, with more than 200 shares in the F&O segment. JPMorgan itself has expanded the coverage from 130 shares to almost 190, which is a reflection of the growing demand of investors.

“India will always be a market for share -of -choice. Liquidity and interest are now much more robust compared to five years ago,” he said.

Nifty Target and Outlook

JPMorgan set its useful objective for 26,500 during the next 6-12 months, which is a reflection of optimism despite the short-term volatility. “Logically, the markets have to go up every year,” said Mookim, adding that catalysts can offer extra triggers in the short term such as the India-US trading discussions.

Although he recognized volatility and global uncertainties, Mookim repeated that the relative ratings of India and structural growthogers make it one of the few large economies with a visible long -term growth.