Stock Market News

Citi Research Delivers Insight on Post-Election Market Sentiment

2024.06.08 08:46

Citi Research Delivers Insight on Post-Election Market Sentiment

The recent election results in India, contrary to exit poll expectations, have stirred up market dynamics, prompting a surge in volatility and a potential shift in risk perception. Here’s a breakdown of Citi Research’s analysis and initial reflections on the implications:

1. Valuation Volatility: The disparity between exit polls and actual outcomes may lead to short-term fluctuations in valuation multiples. Indian markets, currently trading at a significant premium compared to historical levels and emerging market indices, could see adjustments as risk perception evolves.

Unlock the true value of stocks with InvestingPro by clicking here – your ultimate stock analysis tool! Say goodbye to inaccurate valuations and make informed investment decisions with precise intrinsic value calculations. Get it now at a limited-time discount of 10%!

2. Strategic Disinvestment: The market’s outlook on strategic disinvestment is expected to become more cautious, awaiting further clarity in the upcoming budget. Specific divestment targets may see reduced probabilities in the near term.

3. Focus on Jobs and Rural Consumption: Anticipating a potential emphasis on job creation and rural consumption in the budget, investors may turn their attention to rural-focused sectors. Consumer and auto stocks like HUL, Dabur (NS:), M&M, Maruti (NS:), and Hero could benefit in the short term.

4. Public Sector Undertakings (PSUs): While the NIFTY PSE index witnessed a sell-off post-election, selective opportunities remain attractive. Names like NTPC (NS:), GAIL (NS:), and Bharat Electronics (NS:), backed by favorable medium-term growth drivers, are viewed favorably despite near-term volatility.

5. Infrastructure and Capex: Expectations regarding growth in infrastructure and capital expenditure may undergo reassessment, potentially impacting valuation multiples in the short term. However, government prioritization of these sectors, coupled with expectations of sustained capex, bodes well for long-term prospects.

6. Mid-Cap Pressure: With an increase in risk perception, mid-cap stocks, particularly those that have outperformed large caps in recent years, could face pressure.

7. Tax Policy Outlook: Investors may perceive a lower likelihood of capital gains tax increases in the current scenario, influencing market sentiment accordingly.

8. Energy Sector: The possibility of including gas under the Goods and Services Tax (GST) umbrella could benefit the gas value chain. Companies like GAIL and City Gas Distribution (CGD) firms stand to gain from this potential development.

9. Financial Sector Preference: Citi Research maintains a positive stance on private sector banks over public sector counterparts within the financial sector.

10. IT Services Caution: While the defensive nature of IT services may offer short-term benefits, Citi Research remains cautious about the sector’s long-term business prospects.

Offer: Click here and don’t miss out on this exclusive offer to access premium features of InvestingPro, including the powerful screeners, fair value calculator, financial health check, etc. and embark on your journey towards financial success. And the best part? It is currently available at a 10% discount.

Read More: Goldman Sachs (NYSE:) Report: Economic Impacts of a Possible Coalition Government

X (formerly, Twitter) – Aayush Khanna



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 97,882.23 0.28%
ethereum
Ethereum (ETH) $ 3,380.73 1.22%
tether
Tether (USDT) $ 1.00 0.06%
solana
Solana (SOL) $ 252.64 1.85%
bnb
BNB (BNB) $ 659.46 0.36%
xrp
XRP (XRP) $ 1.44 1.24%
dogecoin
Dogecoin (DOGE) $ 0.422598 3.35%
usd-coin
USDC (USDC) $ 1.00 0.09%
cardano
Cardano (ADA) $ 1.05 1.96%
staked-ether
Lido Staked Ether (STETH) $ 3,376.84 1.22%
tron
TRON (TRX) $ 0.209203 3.03%
avalanche-2
Avalanche (AVAX) $ 41.67 1.75%
stellar
Stellar (XLM) $ 0.538763 10.12%
the-open-network
Toncoin (TON) $ 6.10 5.44%
shiba-inu
Shiba Inu (SHIB) $ 0.000025 5.00%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,995.79 1.42%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 97,450.11 0.34%
polkadot
Polkadot (DOT) $ 8.89 3.13%
chainlink
Chainlink (LINK) $ 18.17 1.54%
bitcoin-cash
Bitcoin Cash (BCH) $ 511.86 1.47%
weth
WETH (WETH) $ 3,380.32 1.29%
sui
Sui (SUI) $ 3.36 3.72%
near
NEAR Protocol (NEAR) $ 7.08 9.50%
pepe
Pepe (PEPE) $ 0.00002 3.87%
leo-token
LEO Token (LEO) $ 8.62 0.03%
litecoin
Litecoin (LTC) $ 96.72 4.54%
uniswap
Uniswap (UNI) $ 11.01 0.11%
aptos
Aptos (APT) $ 12.37 6.37%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,556.96 1.38%
hedera-hashgraph
Hedera (HBAR) $ 0.142532 6.11%
internet-computer
Internet Computer (ICP) $ 11.35 5.92%
usds
USDS (USDS) $ 1.00 0.10%
crypto-com-chain
Cronos (CRO) $ 0.186632 6.09%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.563241 3.75%
ethereum-classic
Ethereum Classic (ETC) $ 28.81 4.60%
render-token
Render (RENDER) $ 8.07 1.32%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.51 2.40%
bittensor
Bittensor (TAO) $ 529.73 1.96%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.03%
kaspa
Kaspa (KAS) $ 0.151939 1.67%
arbitrum
Arbitrum (ARB) $ 0.859612 3.68%
whitebit
WhiteBIT Coin (WBT) $ 24.43 1.17%
bonk
Bonk (BONK) $ 0.000046 4.61%
dai
Dai (DAI) $ 0.999616 0.02%
vechain
VeChain (VET) $ 0.042791 1.10%
blockstack
Stacks (STX) $ 2.29 7.73%
filecoin
Filecoin (FIL) $ 5.62 6.57%
cosmos
Cosmos Hub (ATOM) $ 8.59 7.14%
okb
OKB (OKB) $ 56.19 8.96%
mantra-dao
MANTRA (OM) $ 3.66 2.26%