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Equity markets remained volatile but ended on a high in calendar year 2023. Also, the overall market cap of equity markets has crossed $ 4 trillion in December.
Will the equity market continue its rally in 2024? Let’s hear from experts.
Ashish Naik, Equity Fund Manager, Axis Mutual Fund
Outlook
- India attracted $16 billion from foreign portfolios and $22 billion from domestic institutional investors this year
- India's equity indices hit record highs with the Nifty 50 up by 18.4%, BSE Sensex up by 17.3%, mid cap 100 up by 44% and small cap 100 up by 52.8% propelling market cap beyond the $4 trillion mark
- India's growth trajectory is expected to remain on a strong course supported by a recovery in capex and industrial activity
- Mid and small cap stocks trade notably high above historic premiums compared to large caps
- Overall, stronger economic growth prospects and an improving earnings outlook are expected to augur well for equities in 2024
Promising sectors
- Banking, automobiles, retail NBFCs, capital goods, industrials and real estate
Asit Bhandarkar, Senior Fund Manager – Equity, JM Financial Asset Management
Outlook
- During mid-December, there were significant swings in the equity markets, which led to the mid cap and small cap index underperforming the large cap index
- India's quarterly profit growth was positive and the country's industrial and corporate capex also showed positive signs
- Large caps are still valued attractively as compared to the midcap and smallcap categories
- Numerous fund offerings and market dilutions of promoters and strategic investors are rapidly draining the liquidity
Promising sectors
- Banking, real estate, automotive, electricity and public sector undertakings (PSUs) may continue to grow
Fund recommended
- Investors should consider hybrid funds to take advantage of volatility
- Flexicap funds for long-term investors and SIPs in mid cap funds will continue to perform well
Chintan Haria, Principal – Investment Strategy, ICICI Prudential AMC
Outlook
- In 2024, the attractiveness of the Indian market to foreign investors will impact market levels
- Despite the current fair valuation, a substantial rally in 2024 would increase short-term downside risks. Consequently, investor risks are notably higher in 2024
- Post-Feb 2023, we have observed a predominant interest in equities. However, we advocate a broader focus on asset allocation
Promising sector
- Small and midcap sectors have become extremely overvalued at this point
- Optimal approach to asset allocation can be achieved through hybrid categories such as multi-asset, aggressive hybrid, balanced advantage and equity savings
Fund recommended
- Large-cap stocks seem to be better positioned than midcap and smallcap
- It is advisable to opt for flexi-cap, multi-cap or large-cap funds
Tejas Gutka, Fund Manager, Tata Mutual Fund
Outlook
- Indian equities markets remained positive in December, with frontline index increasing by 6 to 8%
- December month saw some catch-up from large caps, which led the rally along with mid-caps, while small caps lagged behind
- The continuation of the profit growth trend, capital spending and stable liquidity are some of the present market triggers
- Valuations across market cap sectors are higher than long-term averages. We believe that large caps may provide better valuation than mid cap or small cap
Promising sectors
- We are bullish on the economy's cyclical sectors such as finance, capital goods, infrastructure, real estate and building materials
Fund recommended
- Investors can consider balanced/hybrid funds and large/multi/flexi-cap funds
