Global macro factors may be less relevant in 2017: Kotak

Sanjeev Prasad of Kotak Institutional Equities says he believes the global 'macro' factors may be less relevant in CY17.

With developed market yields starting to move towards normal levels on the back of anticipated economic recovery, attention will shift to fundamentals once again unless developed market economic growth were to falter in CY17, he says.

Given the disappointment in earnings over the past few years, Prasad feels investors would naturally be a bit wary about placing a great deal of confidence in consensus earnings estimates for FY17-19.

He says FY17 earnings growth of 13 percent (Nifty 50 Index basis) is largely back-ended and reflects the very low base of net profits in several stocks in H2FY16.

Meanwhile, Mixo Das of Nomura says he expects some weakness in Asian equities in H12017, as earnings and valuations both come under pressure, with some recovery later.

He is structurally overweight on Indonesia and India (top Overweight) on a combination of improving growth and progress on reforms, notwithstanding expected periods of consolidation.

"2017-end Sensex target is 31,340," Das says.