The 50-share index Nifty will hit 11,300 in the course of the year, but there would be lot of volatility because of geopolitical reasons and local political calendar, said Bharat Iyer, head-India Equities Research, JP Morgan.
It is not a bear market, but we are in a mature bull market and so returns are expected to be moderate, Iyer said.
"One can expect a 10-12 percent returns at best from the market over the next two years, Iyer told CNBC-TV18.
Political uncertainty would lead to volatility in the market, but it is unlikely to impact sentiment, he said, adding that market at the headline level is not pricing in politics.
Midcaps would continue to remain vulnerable because there were meaningful pockets of excess valuations there, he said.
IT is appealing from a tactical point of view and the rupee depreciation will be a big tailwind for the space, Iyer said. However, he does not think pharma is a sunrise sector yet. The house has a bottom-up approach towards it, he added.
According to him there is also a structural opportunity in the urban consumption theme.
Talking about foreign institutional investors (FII), he said emerging market investors by and large are running a neutral to marginally overweight position on India.