Bank of America (BOFA) Securities has cut down Nifty target for December substantially by 2100 points from 19,100 to 17,000 citing anticipation of earlier than expected interest rate hike by the US Federal Reserve.  

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The global brokerage firm also downgraded auto sector, maintained an 'underweight' rating for the IT sector, while remained bullish on healthcare and FMCG sectors.  

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As per Zee Business TV report, It is expected that Fed may increase interest rate hikes by 150 bps by July 2022. "Fed may increase rate by 50 bps in March and 100bps in July," said Varun Dubey, senior research analyst at Zee Business.  

Besides, the Fed may hike interest rates thrice next year. Also, the Reserve Bank of India (RBI), which maintained status quo around key rates in Monetary Policy Committee meeting earlier this month, could also increase rates by 100bps by March 2023.      

"This could calm down market valuation and domestic equity may witness volatility.  However, good earnings in coming quarters can help the market going forward," highlights report.  

The research also highlights that India may have best GDP growth and earnings growth in Calendar Year 2022.  

Earlier, ICICI Securities has maintained its March 2023 target for Nifty. Based on earnings estimate by one quarter, our March’23 target for NIFTY50 is 19,800, the brokerage has said.  

"As per the RBI’s latest forecasts, inflation (CPI) is expected to dip in FY23 to 4.5% (5.3% in FY22) which could mitigate cost pressures going ahead, while the opening up of the economy post the omicron wave is expected to improve capacity utilization rate (68.3% in Q2FY22). We expect NIFTY50 EPS to grow at a CAGR of 16-17% over FY22-24. Rolling forward our earnings estimate by one quarter, our March’23 target for NIFTY50 is 19,800," the brokerage ha said.