Nomura sees Nifty at 15,340 by March'22; sees risks to FII flows in FY22

Markets, Nomura believes, are dealing with three headwinds - the resurgence of Covid-19 cases; inflationary pressure with the rise in commodity prices; and rich valuations

A sharp spike in Covid cases over the past few weeks, movement curbs imposed to in select cities to ‘break the chain’, elevated commodity prices that may stoke inflation coupled with the rich valuation of Indian markets has led Nomura to cut its Nifty50 target to 15,340 for March 2022 (earlier target: 14,680 by December 2021) – a modest rise of 2.7 per cent from the current levels.

Post the rally from mid October 2020, Nomura said, the market has re-rated and now trades at 21x one-year forward earnings, with valuations higher than the historical average.

“The expectation of favorable