New Delhi
Geojit Financial Services Head of Research, Vinod Nair, anticipates a near-term consolidation in the market due to elevated valuations, concerns over El Nino, and a global slowdown in GDP. The recent market surge to new highs was driven by positive indicators on both domestic and global fronts. Nair highlighted robust domestic industrial production and manufacturing PMI, along with the RBI’s optimistic remarks on India’s GDP forecast, contributing to the bullish trend. The ease in US bond yields and the expectation of multiple rate cuts by the Fed in 2024 further fueled optimism, with investors expressing confidence in a potential soft landing for the US economy in H2CY24. The IT sector experienced a notable 7.6% rally during the week, driven by expectations of increased demand from the US, optimism about AI-based opportunities, and the hope for Fed interest rate cuts in 2024. Joseph Thomas, Head of Research at Emkay Wealth Management, observed that equity markets across sectors and market caps responded positively to the Fed’s decision to hold rates. The decision, coupled with the prospects of future rate cuts, contributed to upward movements in both US and Indian markets. Strong GDP growth figures in both countries further boosted market sentiment. While acknowledging the potential short-term impact and the likelihood of profit booking towards the year-end, Thomas expressed confidence in equities displaying superlative performance based on solid economic performance and gains in earnings. The market outlook remains influenced by factors such as the Fed’s monetary policy, global economic conditions, and ongoing economic growth trends.
