NEW DELHI: Last week, when the market hit a record high, it sent mixed signals among analysts. Many sent a cautious note to their investors and retail investors booked their profit and exit. However, a handful remained too bullish about India’s growth story, including BNP Paribas.
It expects the Sensex to touch 50,500 by the end of 2021, going ahead – up nearly 9.5 per cent from the current levels, as the research firm retains an ‘overweight’ rating on India, citing persistence of market leaders and quality stocks.
India continues to benefit from two phenomena—big stocks are getting bigger and the availability of quality stocks in relative abundance compared to its Asian peers, it said in a note.
“We continue to focus on quality and market leaders in India. Private banks and insurance companies should continue to benefit from market share gains. Consumer stocks benefitting from domestic rural demand and service exporters benefitting from reviving global deal flow shall continue to dominate the investment landscape,” wrote Manishi Raychaudhuri, Head of Asia Pacific equity research, BNP Paribas in his Asia Strategy 2021 report.
Among Indian stocks, BNP has included ONGC and Marico in its model portfolio and has dropped Britannia.
The optimism was evident as the shares of Burger King more than doubled in best listing day show in three years.
After an expected contraction of 11.4 per cent in 2020, it expects India’s gross domestic product (GDP) to grow at 11.6 per cent in 2021 and consumer price inflation (CPI) is likely to be at 4.3 per cent next year.