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If 2023 was a tale of two halves, with extraordinary volatility in bonds and flip-flopping equity market narratives in the first six months, followed by a robust comeback of red-hot equities, then 2024 so far might be viewed as a cohesive narrative. The final stretch of the disinflation journey has recently proven to be the most challenging, with incremental data continuously adjusting market expectations regarding the timing and extent of rate cuts in CY24. Moreover, countryspecific factors are increasingly influencing policy actions and their timing.

While central banks have suggested that cuts will begin this year, the exact timing of the first cut is less important than the pace and magnitude of the entire cutting cycle. Signs of still-sticky price pressures and an economy in good health suggest the cutting cycle may be shallow. Yet, central banks have recently shown a bias towards easier monetary policy, particularly the Fed.

India’s economy remains robust. Reforms continue to improve the business environment. The country is benefiting from a young, expanding population and a geopolitical backdrop favoring its rise as a manufacturing base. Maturing capital markets also bodes well for future investment opportunities. While many aspects of India’s growth story are well-known, navigating a vast country experiencing major demographic, economic and societal shifts is not without complexities. These include rural poverty, infrastructure gaps, and the country’s ambitions to balance growth while decarbonizing. We expect India to remain an attractive investment opportunity and a stronger-for-longer growth story. To capitalize, investors should consider a selective approach and focus on solid businesses aligned with secular tailwinds.

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