Dec 31, 2016

2017 Stock Market Outlook Of Major Brokerage Houses In A Glimpse

Here are brokerage firms' views on how to trade market and which stocks to pick in 2017.

·         Improving visibility of India earnings post demonetisation could lead to a bright spot in H1CY17 for Indian equities.
·         Key events to watch out in CY17 are: progress on GST, timing of earnings normalisation and inflation trajectory and rates.
·         Stock pick strategy  (a) Lower weight on financials slightly; add Shriram Transport Finance (SHTF) post 35 percent correction from high; (b) add Hero Moto post recent upgrade (c) reduce underweight to IT services marginally given dollar appreciation

Bank of America Merrill Lynch

·         Indian equity can match beat bonds
·         December-end Sensex target of 29000
·         Lower stock prices offer increased margin of safety.
·         Market earnings growth should improve
·         Stock pick strategy - Prefer banks, rural plays (two-wheeler and tractors), large caps (midcaps expensive)

Morgan Stanley

·         Equity markets looking attractive and poised for double digit returns in 2017
·         Equities likely to deliver 15 percent returns in rupee terms in 2017
·         Growth is in a U-shaped recovery albeit hurt in the near term by demonetisation
·         Stock pick strategy - Underweight defensives, buy rate sensitives Add JSW Steel , Shriram City Union Finance   and Sun Pharma  
·         Base case for December 2017 Sensex is target 30000

JP Morgan 

·         Earnings growth is expected to be 16 percent for FY17 and 21 percent for FY18
·         See better rural as well as urban demand
·         Expect 25-50 basis points rate cuts by RBI over next 6-9 months
·         Top Picks – HDFC Bank   , YES BANK   , M&M   , Vedanta   and DLF   Stocks to avoid – Bharti Airtel   , ONGC   and BHEL    

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