ICICI Direct predicts Nifty50 to reach 24,200 in 2024
What's the story
ICICI Securities predicts a bright future for the Nifty50 index, setting a target of 24,200 by 2024. This growth is expected to be fueled by foreign fund inflows.
"Heavyweight stocks from BFSI, Auto, Cement, and Healthcare should lead Nifty toward 24,200 levels in CY-24," said Pankaj Pandey, Head Research, ICICI Direct in a report.
Currently, India's benchmark indices are trading near record-high levels.
On Friday, Sensex closed 0.34% higher at 71,106.96 and Nifty50 closed 0.44% up at 21,3449.40.
Details
Foreign fund inflows and market performance
The impressive performance of Indian indices is attributed to the resurgence of foreign flows, which have outpaced other emerging markets.
As the ICICI Direct report states, "The net flows for the current calendar year is nearly $20 billion while the rest of the emerging markets have seen nominal flows."
Indian markets have shown remarkable returns even as most of the markets are still reeling near their 2021 highs, the report noted.
What Next?
Dollar index weakness and emerging markets
The dollar index is expected to weaken as the US Federal Reserve shifts its policy stance. The Fed may reduce interest rates in 2024.
The report explains, "As a result, we expect the dollar index to weaken further and capital flows should be seen into emerging markets."
"Historical evidence suggests that India should be the major beneficiary of these flows," the report added.
Insights
Sector-wise expectations and top picks for 2024
ICICI Direct anticipates continued growth in healthcare and financial stocks, attracting more foreign investment.
Interest rate cut expectations may also drive fresh flows into the construction and metal sectors in 2024, the brokerage added.
The firm's top picks for 2024 include Dalmia Cement, Federal Bank, GAIL India, Hindustan Copper, IPCA Laboratories, and Shriram Finance.
Additionally, Shriram Finance and Bharat Electronics are likely contenders to replace UPL and BPCL in the Nifty50 index during next year's rebalancing.