Market Outlook for November 2024
In October, the Indian equity markets underwent a correction due to record outflows.
FPIs sold Rs 94,000 crore worth of stocks in October 2024, due to elevated stock valuations in India and attractive valuations in China.
Indian Equity market responded positively to Donald Trump’s win.
India appears to be among the primary beneficiaries of Trump’s Presidency concerning economic and foreign policy matters.
Following his victory in the 2024 US presidential election, Donald Trump is expected to implement a series of significant policy changes across various domains. Potential segments to look out for are Defence, Energy Dynamics, Trade, Manufacturing, and Technology.
The Chinese markets, however, are expected to face heightened volatility and uncertainty due to anticipated sanctions and high import duties.
A notable drop in global crude oil prices on international markets has positively influenced market sentiment and will play a positive role in containing inflation.
In the near term, all eyes are on the Federal Reserve’s next move on rate cuts. It is widely expected that the Fed will cut the rates for a second consecutive time.
The next month is expected to be volatile. The upcoming year will likely see a bottom-up stock market, where sector rotation and stock picking are key. Over the next three years, a bullish market is anticipated.
The Indian economy and stock market are well supported by government Policies and strong micro and macro fundamentals that will continue to drive corporate capital expenditure, corporate earnings, and GDP growth.
Large-cap valuations appear reasonable and fair, while valuations for mid and small caps remain elevated.
The RBI enhanced domestic gold reserves by 102 metric tonnes between April and September 2024, raising the total to 510.46 metric tonnes.
Amid rising geopolitical tensions, India has shifted significant quantities of gold from the UK to domestic vaults, marking one of the largest such movements since 1991.
Overall, India remains on a strong footing with positive GDP growth momentum of 6% for the next 5 years and is projected to grow from a 3.2 trillion to a 5 trillion economy. This growth is further supported by a lower fiscal deficit, higher GST collections, and robust micro and macroeconomic fundamentals.
