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Goldman Sachs advises caution on Indian equities amid global macro risks

EditorPollock Mondal
Published 05-10-2023, 12:08 pm
© Reuters.
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Goldman Sachs Group Inc (NYSE:GS). analysts have advised investors to approach Indian equities with caution due to a range of global macroeconomic risks. The warning, made on Thursday, comes in the wake of high oil prices, increasing U.S. interest rates, a robust dollar, and elevated valuations following a sharp rally since March.

The analysts recommend this conservative stance for the next three to six months. This advice is influenced by the actions of overseas investors who sold $2.3 billion worth of Indian stocks in September, following six months of inflows.

Adding to the economic uncertainty is India's upcoming national elections, with Prime Minister Narendra Modi seeking a third term. The electoral outcome could have substantial impacts on the country's economic landscape.

Analysts highlighted that India's NSE Nifty 50 Index is currently trading at 18.2 times its one-year forward earnings. This makes it the most expensive national benchmark among major Asian markets, further justifying their recommendation for caution in investing in Indian equities.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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