Stock market, Trump & Iran: Nifty at 29,000? Post-war strategy, stocks to watch

Emkay Global on Friday said it had retained its March 2027 Nifty target of 29,000, as it sees earnings growth accelerating to 14 per cent for Nifty companies in FY27, led by a broad macro and earnings recovery once the US-Iran war ends. To be sure, most Asia markets fell up to 1 per cent in trade today amid doubts over sustainability of the US-Iran war ceasefire after the US President Donald Trump said Iran launched missile attacks on three of its Destroyers, but were knocked down. 

Iran, on the other hand, insisted the US targeted two ships entering the Strait of Hormuz and carried out strikes on Iranian ​territory. Trump later told an ABC reporter that the ceasefire was still in effect and sought to play down the exchange, adding that "It's just a love tap."

US-Iran peace talks theme still in play 

Emkay said the US-Iran peace deal is still in play. It said even if is another false start, the war will end and Hormuz will reopen within weeks. The brokearge said it is positioning its portfolio for such a scenario. 

"We retain our Mar-27 Nifty target of 29,000, as we expect earnings growth to accelerate in FY27 (14 per cent for Nifty). We change three stocks in our model portfolio, but the positioning remains unchanged, with Discretionary and Industrials the key OW sectors," it said.

Emkay said its portfolio positioning remained geared for a post-war scenario where it sees declining oil prices and a consumption recovery in India. 

Stock portfolio strategy
Its biggest overweight continues to be consumer discretionary, where it ahs a mix of internet, autos, and retail stocks. 

"We have significant exposure to lenders but remain underweight on financials as we are selective on the sector. Despite strong tailwinds, we remain slightly underweight on IT, which we believe is facing definite long-term challenges, though valuations may have over discounted some of those risks," it said.

Emkay said it retained a significant exposure of its portfolio to the post-war oil price weakness theme. Its key picks are Larsen & Toubro (L&T) (7 per cent weight). A total of 25 per cent of Emkay's overall exposure has been to post-war oil price weakness theme. It said it is playing the theme with exposures to HPCL (5 per cent), Tata Motors CV (5 per cent), Maruti Suzuki India Ltd (4 per cent) and Delhivery (4 per cent). 

Emkay said the peace trade seems to be back on the table, with media reports indicating Iran is considering a US proposal for re-opening of SoH, with a result expected in days. Crude corrected, with July Brent futures down to $101 a barrel from the May 4 high of $114 a barrel. 
"We do not rule out this being (yet another) false dawn but remain sanguine that the issue will be resolved in coming weeks. We expect crude to slip to USD80/bbl in coming weeks and have captured this in our market view/portfolio positioning," Emkay said.