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Below mentioned are the views by Mr. Anshul Arzare, Jt. MD and CEO, YES SECURITIES

“Due to geopolitical tensions in the Middle East and given that gold is regarded as a safe-haven asset, the price of gold has been surging on backdrop of the same. Gold demand in India typically experiences a significant uptake towards the end of the year, given the festive season, which includes Diwali and Dussehra, as well as the wedding season. This season, however, we could see a reduction in retail purchases of gold products if the gold prices persist at current levels. It's important to consider that gold prices are responsive to global developments. If gold prices decline, there may be a rise in demand for gold, particularly in December, driven by the wedding season fervour.

The Indian markets have performed well in Samvat 2079, withstanding global uncertainties like ongoing geopolitical tensions, global inflation concerns, and longer-than-expected high interest rates. However, India’s macro indicators remain robust. GST revenue in October increased 13% to INR 1.72 Crores, Manufacturing PMI in October was 55.5, which is indicative of continued expansion; Indian railway freight loading rose 8.47% in October, and electricity consumption rose 21%. Auto sales are up 12.5% due to robust demand; however, inventory levels remain a source of concern. India has remained resilient to oil shocks and spikes in global grain prices, and even with the spike in demand during the festive season, the inflation levels are likely to remain below 5%. While higher rates in developed economies have caused India to see a dip in inflows in the last few months, the situation is likely to reverse post-Diwali.

Also, there has been strong domestic inflows in from of monthly SIP inflows etc. This was a whopping INR 16042 cr in September 2023. This is 23.6 % YoY growth (September 2022 SIP inflow being INR 12976 cr ) and it’s a 52.5% jump from September 2021 inflow ( INR 10519 cr ). As we see that the growth prospects in developed economies are challenging, this will encourage renewed inflows into emerging markets like India. India is likely to remain one of the few credible growth stories in the second half of this financial year, given a strong credit growth and robust corporate earnings. Strong fundamentals have helped ease investors’ worries, despite global headwinds. Even though there are some short-term uncertainties, long term India remains attractive investment destination for both domestic and foreign investors. India Inclusion of India’s bond in the JPMorgan Bond Index is another huge plus for India, it is expected to encourage inflows to the tune of approximately $23 billion into the country.”

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