Mumbai: Bank of America Securities said it continues to stay cautious on richly-valued Indian equities following the reciprocal tariffs by the US on all its trading partners. The brokerage said it expects less than 7% returns for the Nifty in 2025 and losses in small and mid-cap stocks.
The brokerage said while the direct impact of tariffs on India is limited, it could have a cascading impact on domestic manufacturers, delayed capex decisions and lower credit growth.
"We see these factors having an impact on currencies and potential for risk-off scenario/ flight away from equities," said BofA Sec said in a client note.
It prefers domestic cyclical industries such as financials, real estate, and auto over globally-linked industries such as IT, metals, energy and pharma.
The brokerage said while the direct impact of tariffs on India is limited, it could have a cascading impact on domestic manufacturers, delayed capex decisions and lower credit growth.
"We see these factors having an impact on currencies and potential for risk-off scenario/ flight away from equities," said BofA Sec said in a client note.
It prefers domestic cyclical industries such as financials, real estate, and auto over globally-linked industries such as IT, metals, energy and pharma.
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