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Below the Quote on Market outlook report for December 2024 by Mr. Rajeev Radhakrishnan, CIO, Fixed Income, SBI Mutual Fund and Mr. Gaurav Mehta, CIO, Alternatives Equity, SBI Mutual Fund

1. Global Market Trends:

* The performance of US equities, treasury yields, and the US dollar following political developments.

* Impacts on emerging markets (EMs) and capital flows.

* Indian Markets:

* Analysis of the Indian equity market, including index performance, valuation trends, and corporate earnings.

* The impact of policy decisions and political outcomes (e.g., state elections) on investor confidence.

2. Fixed Income Markets:

* Trends in bond yields, including movements in government securities (G-Secs) and corporate bonds.

* RBI’s monetary policy approach amidst inflationary pressures and growth deceleration.

3. Currency Markets:

* Movements in the Indian Rupee (INR) relative to the US Dollar (USD) and associated forex market dynamics.

* The role of RBI's interventions in managing currency stability and liquidity.

4. Macroeconomic Insights:

* Assessment of GDP growth, inflation, and their influence on monetary policy.

* Forward-looking strategies for managing inflation and liquidity in a challenging economic environment.

Purpose of the Report:

* Investor Guidance: To inform investors about the state of markets and potential risks/opportunities.

* Strategic Insights: Offer perspectives on economic trends and how they might shape investment strategies in equities, bonds, and forex markets.

* Policy Analysis: Evaluate the likely responses from central banks, particularly the Reserve Bank of India (RBI).

In essence, the report serves as a strategic outlook for December 2024, helping stakeholders navigate the financial landscape effectively.

Key Pointers from Monthly Presentation:

Economy and Markets Overview:

1. Impact of Elections:

* Trump's victory led to optimism about favorable U.S. economic policies, including corporate tax cuts, deregulation, and higher tariffs.

* BJP-led alliance's victory in Maharashtra boosted market confidence but highlighted reliance on welfare schemes for political gains.

2. Global Economic Developments:

* Fed rate cut expectations reduced, with a shift to 3.7-3.8% terminal rate.

* Strengthening of the U.S. dollar led to depreciation in most emerging and developed market currencies.

* China announced fiscal stimulus measures to support economic recovery, but consumer confidence remains low.

3. Indian Economy Highlights:

* Q2 FY25 GDP growth moderated to 5.4%, driven by weak consumption and investment.

* Policy support is necessary to enhance growth, with expectations of 6.4%-6.5% growth in the latter half of FY25.

* Private sector capex is improving but still requires government backing for momentum.

4. Sector-Specific Trends:

* Urban and rural consumption demand showed mixed signals; tractor sales surged while car sales fell.

* Government capex increased in Q3 FY25, aiding growth prospects.

Equity Markets:

1. Global Trends:

* Developed market equities outperformed emerging markets, with U.S. indices leading the rally.

* Precious metals corrected slightly; industrial metals like copper and silver showed moderation in November.

2. Indian Markets:

* Nifty and Sensex showed marginal movements in November, with IT and consumer durables gaining while power and metals declined.

* Healthcare emerged as the top-performing sector on a YTD basis with a 38% gain.

3. Liquidity:

* FIIs continued to sell in Indian equities, while domestic institutional investors and retail flows showed resilience.

* Primary market activity increased compared to the previous year.

Commodities & Inflation:

1. Gold and Dollar Trends:

* Gold prices remained high historically but saw a slight correction due to a stronger dollar and rising U.S. real yields.

* Commodity prices exhibited mixed trends, with oil and coffee prices increasing while metals moderated.

 2. Inflation in developed economies remains above target, driven by loose fiscal policies and global price pressures.

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