Most brokerages, including Nomura, had downgraded Indian equities in October 2021. Heading into 2022, a change in policy stance by the US Federal Reserve (US Fed), inflation risk, and the new Covid variants are some of the risks that will impact the global economy and financial markets, including India, Nomura said.
Despite these headwinds, Nomura expects Asian stocks to deliver double-digit returns by end-2022 (base case end-2022F MXASJ target is 925; around 18 percent higher from the current levels), driven largely by earnings growth and flat multiples from a low base.
“Material declines for Asia stocks are unlikely, as we see several buffers this time (valuations, positioning, fundamentals). Peaking US inflation, and the bottoming out of growth and modest policy easing in China into Q1-2022 should provide relief for Asia stocks eventually,” Nomura said.
Read more