Listen to this article
Owing to outflows from foreign investors and valuation concerns, equity markets remained volatile in March.
In fact, after the strong outperformance of mid and small-cap categories over large-caps over the last few years, a partial reversal was seen in March. Stress tests by SEBI on midcap and small-cap funds and RBI’s stern action on a few financial institutions for not adhering to the regulatory norms are some of the key highlights of the equity markets in the month gone by.
But how will the markets behave in the coming month? Let’s find out what the experts have to say as they share their views on the equity markets for April 2024.
Daylynn Pinto, Senior Fund Manager, Equity, Bandhan MF
- In the near-term, market is expected to enjoy the benefit of global liquidity and favourable macro-economic conditions
- With probability of the return of the current regime, markets are not likely to experience any meaningful correction
- Over the medium-term, global macros like US economy and Fed actions could define liquidity movements and equity markets
- Mid and small cap stocks continue to trade at full valuations despite the recent correction in March. While large caps are not necessarily cheap, there are select pockets wherein risk-reward appears more favourable as compared to mid and small caps
Promising Sectors
- Private financials, auto and healthcare are the recommended sectors
Fund Recommended
- In the current markets, multi-assets funds can be considered to balance one’s portfolio
Sanjay Bembalkar, CFA, Co-Head Equities, Union MF.png)
- Equity markets are likely to stay volatile in the near term. Small corrections can happen in mid and small caps
- Upcoming budget post elections and recovery in rural markets will have to be keenly watched
- Investor behaviour over the volatile phase and investment flows from domestic investors should be given attention as many would be facing equity volatility for the very first time
- Due to better risk-reward returns in large caps, investors can consider large cap heavy products while allocating to equity asset class. In mid-caps and small-caps, investors can have staggered approach over next 6 to 9 months
Promising Sectors
- Auto-auto ancillaries and real estate look promising sectors
Fund Recommended
- Large cap and flexi Cap Fund are preferred funds at this time
Santosh Kumar Singh, Fund Manager, Motilal Oswal MF
- In the near term, consolidation in the market is expected with no major gains
- RBI stance on interest rate has to be keenly watched
- As it is the election year, no major announcements from the government or the regulator are expected
- Mid and small caps are trading at high valuations. It is advised to be stock specific in mid and small cap sector as there are areas which still have froth
Promising Sectors
- Capex driven sectors and capital goods driven stocks are likely to perform well
Fund Recommended
- Investors can look at large cap funds, flexicap funds and balanced advantage funds
Satish Mishra, Fund Manager, Tata Mutual Fund
- Near term market is going through high volatility. But India’s economic outlook remains bright. Stable energy prices, despite all the geopolitical unrest, are a respite for India
- Key triggers include earnings growth trajectory of Indian corporates, pick-up in the pace of private capex, policy stance of the central government after the elections and action of RBI on the BFSI sector
- Variables to watch out for are interest rates in U.S, crude oil movements and geopolitical conflicts
- Valuations across all market cap categories are above their long-term averages
Promising Sectors
- Capex-oriented sectors like industrials and capital goods look promising. Pharma, logistics and power can be also be considered
Fund Recommended
- Large caps can outperform
