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Below is the Daily Market Quote By Milind Muchhala, Executive Director, Julius Baer India

“The Indian equity markets have begun the new year on a slightly cautious note, in line with the global markets, continuing the trend visible in December 2022. While expectations remain of softer rate tightening by the global central banks from hereon, concerns remain on the overall economic environment amidst the high interest rates and sticky core inflation. 2023 is expected to be ‘the year of cool down’; both growth and inflation rates globally are likely to slow down, as monetary policy normalisation takes its toll and some of the pandemic-related constraints ease. Overall, the inflation rate is expected to fall more than the growth rates. Indian markets have been one of the best performing markets globally in CY22, aided by its relatively strong growth – both GDP and corporate earnings – and resilient domestic liquidity, a trend likely to continue in CY23 as well. However, in the near term, the markets seem to be running into a few headwinds - record high valuation premium to EMs (although the valuations are only slightly above its own historical averages) which may attract some tactical shifts to other EMs, potential slowdown in exports on the back of global slowdown, and Fixed Income emerging as a viable investment option. Hence, while we continue to remain constructive on the markets, we believe there could be several interim opportunities in the near term as the markets adjust to the headwinds.”

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