The new year could bring relief for those invested in S&P/ASX 200 Index (ASX: XJO) shares, according to forecasting by Citi.
It's said to have tipped the index to gain around 5% over the course of this year. While any gain's a good gain, such a modest rise would see the ASX 200 remain lower than it was at the end of 2021. Fortunately, however, others are more hopeful.
Let's take a closer look at what experts tip 2023 to bring Aussie investors.
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Citi tips ASX 200 shares to gain in 2023
Citi has reportedly upgraded Australian shares to neutral and tipped the ASX 200 to reach 7,400 points by December 2023.
The outlook is based on earnings' expectations at a price-to-earnings (P/E) ratio of 14, The Australian reports.
For comparison, the ASX 200 closed the final session of 2022 at 7,038.7 points and ended 2021 at 7,444.6 points.
Citi Australian equity strategist Liz Dinh was said to have warned of the impact higher inflation and resulting rate hikes could have on Aussie consumers and homeowners.
The effects of flooding on coal production and construction investment, as well as falling household savings, also reportedly worried Citi economists who dropped their Australian GPD growth forecast to 1.4% for 2023.
Citi also reportedly prefers European shares over those listed down under. It's said to believe Europe has more accurately priced in a potential earnings drop.
Commonwealth Bank of Australia (ASX: CBA) economists, meanwhile, expect the ASX 200 could end the year at 7,550 points. That's 7% higher than where it closed in 2022. Though, they also would be surprised to see it gain just 4% to 7,350 points.
CommSec chief economist Craig James expects high inflation could weigh on consumer-focused stocks in the first half of 2023. Meanwhile, an easing of interest rates could be good news for real estate investment trusts (REITs) late in the year.
The expert also tips the Australian economy to "slow, not stall" this year.
However, keeping market watchers on their toes, James commented:
There is upside potential to the forecasts should Chinese authorities be successful in re-opening their economy. And an end to the war in Ukraine should boost investor sentiment across the globe.
But deeper recessions in major economies from persistently-high inflation and interest rates could lead to downward revisions on Aussie sharemarket forecasts.
