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Indian equities will continue to remain one of the favourite destinations for investors in 2024: Edelweiss MF

Indian equities will continue to remain one of the favourite destinations for investors in 2024: Edelweiss MF

According to Edelweiss Mutual Fund, 2024 will be a year of multiple transitions

Tanya Aneja
Tanya Aneja
  • Updated Jan 3, 2024 4:55 PM IST
Indian equities will continue to remain one of the favourite destinations for investors in 2024: Edelweiss MFAccording to Edelweiss Mutual Fund, 2024 will be a year of multiple transitions
SUMMARY
  • 2024 will be a year of multiple transitions
  • India Inc.’s balance sheet is in de-leveraged mode and is operating at high-capacity utilisation
  • In 2024, inflation and interest rates will begin to fall

2023 was a stellar year for the Indian markets. As we head into the new year 2024, it is now time to be mindful of the investment trends which could emerge in the New Year. According to Edelweiss Mutual Fund, 2024 will be a year of multiple transitions.

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"We foresee a shift in the central focus of discussions and analyses pertaining to markets’ movements and investment decisions. In 2024, as interest rates turn more favourable, we foresee that a macro debate will be more about “Political Uncertainty” as opposed to uncertainty about movement in interest rates," said Trideep Bhattacharya, CIO - Equities, Edelweiss Mutual Fund.

"This shift will be because of national elections in two of the major economies of the world— the US and India. These elections will be closely followed by elections in the UK in early 2025. So, political rhetoric across the globe will be a dominant sentiment which will have a bearing on global markets. It will not only have near-term implications, but it also contains the potential to shape geopolitical contours in the next four or five years," he added.

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Sharing the medium-term view, he said that there are two positives which give a strong and convincing basis for an optimistic view. First: India Inc.’s balance sheet is in de-leveraged mode. It is operating at high-capacity utilisation. These factors could lead to a capital expenditure cycle in 2024. Then, the second positive about the Indian markets is moderating inflation. This could improve consumers’ spending power over a period of time.

He expects that in 2024 inflation and interest rates will begin to fall. It will put some more money in consumers’ pockets. This will boost demand for goods and services in a few sectors as opposed to other sectors. Besides this, the pace at which interest rates will come down will have a bearing on the growth in corporate earnings to a certain extent. The pace at which interest rates will be adjusted will be one of the key variables central banks across global markets will thoroughly debate and consider in 2024.

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Edelweiss expects that the theme of selecting stocks based on bottom-up investing will be a key criterion which will result in outperformance in 2024. On the whole, Indian equities will continue to remain one of the favourite destinations for investors in 2024. Manufacturing, Real Estate, Capital Goods and IT services are some of the themes to look at while entering 2024.

Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Published on: Jan 3, 2024 4:55 PM IST
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