Global brokerage and investment giant Nomura has said that the composition of Prime Minister Narendra Modi's new Cabinet suggests "policy continuity" at the moment.
The new Cabinet comprises 30 Cabinet Ministers, five Ministers of State with Independent Charge, and 36 Ministers of State.
Expecting stability in politics, Nomura has held on to its portfolio and estimated that the Nifty 50 index can climb by next year, above 24,860 points.
“Through the course of the past week, we think the concerns have abated. The composition of the Cabinet over the weekend also indicates policy continuity at the moment,” said Nomura.
The brokerage continues to be positive on domestic sectors, with manufacturing and investment themes running over consumption.
Policy stability, such a macroeconomic condition, and steady earnings growth make Nomura positive on equities.
Nomura also expects that the Union budget will celebrate the policy direction and will stay mostly constant.
"The government is expected to continue its focus on fiscal consolidation and prioritize investments and capital expenditure," said the brokerage.
Leading global brokerage firms and market analysts have already asserted that India's economic fundamentals are strong.
In a previous note, Nomura mentioned that reforms in India have generally withstood political challenges.
"We expect the government to maintain the pace of governance and administrative reforms, while leaving the states to address more complex issues related to land and labor," the note stated.
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