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Unlocking market Opportunities:
Indian markets have had a strong run of 24-26% since last Diwali. There was not much correction in indices except some panic days like Election results, Yen carry trade etc.
Over last 3 years, Indian markets had strong performance both in terms of price as well as corporate earnings. Corporate Earnings growth was in the range of 23-26% over FY21-FY24. This was coupled with growing participation from retail investors directly into equity markets through SIPs in MF have resulted in across the board re-rating of stocks and have generated fantastic returns for the investors.
In terms of valuation, Indian markets are slightly on higher side (Current PE: 23.4, Median PE:22.2) as compared to median valuations, but considering earning growth over next few years and macros, Indian markets command premium valuations.
Globally, Investors are awaiting the outcome of 2024 US presidential election which is set to be held on November 5, 2024. The market may face huge volatility due to potential changes in policies and regulations in the presidential election year. Government spending and fiscal measures influence sectors differently, creating sector-specific risks.
During FY24, Global equity markets rallied as the US Fed announced its first rate cut in Sep 2024, marking a dovish shift to its monetary policy and reducing borrowing costs in the economy.
The rising risk of escalation in the Middle east region and its repercussions on global growth is a risk.
A sharp bounce back in Chinese stocks following recent fiscal and monetary stimulus measures, triggered some flows towards China at the cost of India.
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