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BofA said the two key near-term risks facing the market are potential US Federal Reserve rate hikes and heavy primary-market issuances. It expects both risks to peak by October, creating room for a Nifty rally from November. The impact of artificial intelligence on Indian employment remains a longer-term structural risk. Read more: FIIs sell Indian shares worth Rs 14,475 crore in Sept; analyst warns soaring bond yields may deepen selloff The brokerage expects about $30 billion in primary-market issuances between September and December, with activity peaking in October. It also expects the Federal Reserve to raise rates by 75 basis points during the period, compared with roughly 35 basis points currently priced in by markets. BofA believes the earnings downgrade cycle may have peaked after consensus FY27 earnings estimates for the Nifty were cut by 230 basis points year-to-date. It forecasts Nifty earnings growth of 10% in FY27 and 15% in FY28, compared with Street estimates of 12% and 15%, respectively. Read more: India beats a hasty retreat from a crucial market reform The brokerage has shifted its preference from small- and mid-cap stocks to large caps after broader market indices outperformed the Nifty by 13-20% year-to-date. The valuation premium for small- and mid-cap stocks currently stands at 43%, down from a peak of 53%. Within the Nifty universe, BofA is positive on private banks, NBFCs, automobiles, upstream energy, cement, regulated power utilities, jewellery, quick commerce and EPC contractors. It remains cautious on PSU banks, insurance, steel, downstream energy, consumer staples, telecom, healthcare, industrials and information technology. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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