desk
Share
Indian equities are set for another challenging quarter as economic slowdown and inflation have impacted corporate profits and foreign investment. A Bloomberg report, citing a survey of 22 analysts and fund managers, said the Nifty 50 index is expected to fall by at least 5% by March. However, this estimate is in the worst-case scenario. Concerns about geopolitical tensions during a second term of Donald Trump further add to the challenges for local stocks.
After reaching several record highs last year, India's equity market had reached a capitalization of about $ 5 trillion, but now it is facing constant pressure. Due to fears of a decline in consumption, there is an outflow of foreign funds.
Market cap decreased by 48 lakh crores
The total market value of the MSCI India Index has decreased by $ 556 billion (₹ 48.12 lakh crore) after falling more than 13% from its peak in September. Mohit Khanna, fund manager at Poornartha Investment Advisors Pvt Ltd, said, "Indian markets are going through a period of uncertainty." He attributed this pessimism to various domestic and global developments in 2024, which will affect local stocks in the short term. Khanna manages assets worth more than $ 250 million.
Economic growth concerns Concerns are growing over India's growth prospects as recent government data showed the economy will grow at 6.4% in the current fiscal year, well below the average of 8% over the past three years. Vehicle sales have declined in December and consumption sector companies have been impacted. Analysts at HSBC last week downgraded Indian stocks to Neutral. They said investors may re-evaluate their position after lowering FY25 earnings growth estimates for the Nifty to 5% from 15%. However, some of those surveyed said negative returns are expected from the Nifty for the full year. One-third expect the Nifty index to grow by 10% to 15% in 2025. This optimism is mainly driven by the steady inflow of domestic investors. Despite a decline of 8.4% in the previous quarter, the Nifty 50 has posted an annual gain of 8.8% in 2024. This was the ninth consecutive year of growth in the market. Vikas Gupta, Chief Investment Analyst at Omniscience Capital in Mumbai, said that stocks have been predicted to grow by more than 10% and he believes that interest rate cuts will shape the broad direction of India's stock market. Which sectors are expected to grow ? The survey says that amid weakness in the rupee, healthcare and IT stocks can show growth throughout the year. However, no one involved in it seemed bullish on the real estate sector. They are eyeing positive earnings growth momentum, after which they can upgrade the position.
--Advertisement--
_841857761_124x80.png)
