Goldman Sachs sees markets consolidating in third quarter of 2023

Goldman retains its market weight stance and sees Nifty50 at 20,700 by June, implying 6.7 per cent gain since Thursday's close at a record high of 19,497 points

Chiranjivi Chakraborty

Indian equities may have “over-delivered” in the second quarter of the 2023 calendar year relative to the changes in the macroeconomic environment,

Suggesting a consolidation of gains in the near-term, strategists at Goldman Sachs say, “At 21x one-year forward earnings, and at 60 per cent premium to Asia, valuations look expensive” strategists at the investment management, including Sunil Koul, wrote in a note.
 

Goldman retains its market weight stance and sees Nifty50 at 20,700 by June, implying 6.7 per cent gain since Thursday’s close of a record high of 19,497 points.

The index has now climbed over 11 per cent in June quarter, this has been its best performance in around two years.

“History suggests modest forward returns from current starting level of valuations,” Koul added in the note.

The global firm expects the market to consolidate in the third quarter and see better performance the fourth.

According to Bloom­berg data, the Nifty50, at present, is trading at around 18.6 times its one-year forward earnings, which is 

slightly below its five-year average.

That said, Goldman Sachs sees India as, “The best structural growth story in the region where  superior long-term returns and highest proportion of multi-baggers make compelling long-term case”.