Indian Stock Market Outlook For 2022, Top Stock Picks: ICICI Securities

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BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Excessive liquidity and interest rate cut cycle to reverse in 2022 and will weigh on equity valuations. Two factors which will be the hallmark of 2022 are the reversal of the quantitative easing programme of the U.S. Fed and the expected initiation of the rate increase cycle in the U.S.

While these events will weigh on equity valuations in general, the impact will be high for extremely low earnings yield or negative yield stocks (loss makers) with growth uncertainty.

However, in 2022, we will still be in the early stages of interest rate normalisation and the transition from excessive liquidity to adequate liquidity will continue to offer relatively low interest rates with inflation trajectory expected to moderate.

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