IGI Logo

Below  The Quote Market outlook 21 April 2023 By Milind Muchhala, Executive Director, Julius Baer India

'The Indian equity markets have seen a decent pullback from the extreme pessimism witnessed towards the mid of last month. While the overall medium-term outlook remains constructive, the markets seem to be running into a couple of headwinds in the near term, which can invite some profit booking and the markets getting into a consolidation mode. The key monitorable include the upcoming Fed policy and the accompanying commentary (whether the Fed pivots), the progress of the global markets post the recent rally, further estimates on monsoon and the Q4FY23 earnings season which seems to have begun on a slightly mixed note. Apart from the actual numbers, the markets will also remain focused on the post-results corporate commentary, especially related to the demand environment (as the rural demand still remains a bit sluggish) and the margin trajectory with the softening of the input costs providing some respite. On the positive side, with the markets consolidating for the past 18 months, the valuations have turned more reasonable, moving closer to the historical averages. In fact, the performance of the headline index to some extent is masking the sharper cuts that we have seen in the broader markets. Also, with expectations of the peaking of the rate cycle, there could be increasing rhetoric/expectations of easing of the rates in the coming quarters, which could again trigger a risk-on environment. India, with its relatively superior economic and corporate earnings growth, would remain an attractive destination for global flows. Hence, we would look at interim corrections as opportunities to add to equity exposure from an investment perspective'.

Above views are of the author and not of the website kindly read disclaimer