Best FII inflows are yet to come; Heavyweight stocks like RIL, banks look attractive for FY23: Yes Securities

 

• According to Yes Securities, FII inflows are returning to the Indian market and the best of FII inflows is yet to come

According to brokerage and research firm Yes Securities, with a positive turnaround for Indian equities in the fag-end of 2022, FII inflows are coming back to the Indian market and the best of FII inflows is yet to come. In its year-end and 2023 Outlook India Market Strategy report, the brokerage said its research suggests that the Nifty is poised to move to new highs over the next 12 months.

"India holds a solid advantage over other markets and India's manufacturing will benefit from production linked incentives (PLIs) and global re-shoring," the note said.

The softening of retail participation in the market (due to reduction in demat accounts) suggests that the market is not in overheated territory. In such a situation, giant stocks like RIL, Bank and IT Services are looking attractive.

According to the report, central banks will soon freeze rates, while governments will boost growth by providing stimulus through infrastructure spending and loan guarantees. It also signals that the RBI will not necessarily raise rates to prevent inflation, but rather to match the Fed-raising rates. In this regard, brokerage houses see a 0-25 basis points (bps) hike in the repo level by the Reserve Bank of India (RBI) to 6.25- 6.50%.

Yes Securities is bullish on equities and said that the Indian stock market has shown remarkable resilience in key segments of the last three years. While Nifty moves to a new high, the markets tend to be sector agnostic, though midcaps and smallcaps tend to perform much better than Nifty.