BofA revises Nifty target from 19,100 to 17,000 citing rate hike risks

Note says market valuation shrinks if it is above long-term averages before the start of the hike cycle

BofA Securities has revised its Nifty target for December 2022 to 17,000, from 19,100, to price in the risks on account of rising interest rates and bond yields. The brokerage said it now expects a fast US Federal Reserve (Fed) hiking cycle.

"Our US economists are now expecting seven rate hikes in calendar year 2022 (CY22), starting March, and a further four hikes in calendar year 2023, of 25 basis points (bps) each. Also, there are concerns around a potential 50-bp hike in March, 100 bps by July, and inter-meeting hikes, among others. Within India, we expect the Reserve Bank of