Equity Market Outlook

AS ON 31st December 2023



Strong macros: India’s economic indicators remain strong, with real GDP growing at a higher-thanexpected rate of 7.7% in 1HFY24. Inflation in comfortable range and RBI upgrading its GDP growth projections for FY25 gives further comfort of ongoing momentum in the economy.

Fed interest rates near its peak: As the US inflation continues to remain under control and the FED maintains the benchmark rates for the third consecutive time, the likelihood of a rate cut remains high in 1HCY24. This could drive liquidity towards global markets, as evidenced by the rally in global equity markets during Nov-Dec’23. Also, sharp cool down in bond yields indicates positive sentiments towards equity to remain high in the near term.

GST Collection remain strong: GST collection rose 10% YoY to Rs1.65 lakh crore as well as for the period April to December 2023 the collection grew 12% on YoY basis. Healthy collection shows that economic activities continues to remain strong.

Outlook: Geopolitical developments, FEDs stance on interest rates, recovery in rural demand and volatility led by investors pre-empting the outcome of 2024 elections will be the key factors driving the market sentiments. With global liquidity tightening nearing its end, a healthy domestic macro and micro environment, strong domestic and retail participation, and expected political continuity post- 2024 General Elections, bode well for policy momentum in India. We anticipate continued optimism in the market and maintain a positive outlook.