FII selling likely to subside from April, Nifty can touch 25,000 by Dec: Emkay

Mumbai: Emkay Institutional Equities said it expects Nifty to be at 25,000 by December with foreign selling of stocks here expected to subside from April. The index closed at 22,945 on Tuesday.

"We think that this sell-off has largely been triggered by earnings downgrades and we went into October at a slightly frothy valuation as well. Both those factors are now playing out; and going forward, we think we are closer to the end than the beginning of this sell-down," said Seshadri Sen, head of research and strategist - institutional equities at Emkay, in a media conference on Tuesday.

Sen said that the recovery in discretionary consumption is indicated by green shoots in hiring, especially in IT and BFSI sectors, along with a revival in loan growth.


The firm has an 'Overweight' stance on discretionary, real estate, and healthcare sectors, while is 'neutral' on industrials, IT, and Energy. It is 'Underweight' on financials, staples, and materials due to structural concerns and valuation pressures. Emkay's top investment ideas include Lupin, Zomato, Tata Motors, IndusInd Bank in large caps, Escorts and Paytm in mid-caps, and Metropolis Healthcare, Stovekraft, and Quess Corp in the small-cap segment.

The brokerage said selling by foreign portfolio investors (FPIs) is likely to stabilize post-March with valuations having moderated, earnings forecasts bottoming out over the next 2-3 months and a peak in the U.S. Dollar Index (DXY) should also ease rupee depreciation concerns and help stem FPI selling.