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Below quote by Shibani Sircar Kurian, Senior EVP & Head- Equity Research, Kotak Mahindra Asset Management Company-

“Indian equity markets witnessed volatility during past week on the back of elevated US bond yields and geo-political tensions. FIIs turned net sellers of Indian equities while DIIs remained net buyers.

The US FOMC, maintained the Federal Funds Rate target range at 5.25-5.50%. The latest dot plot showed that a majority expect one more rate hike this year and a 50 bps cut next year. The RBI MPC, maintained status quo on the Repo rate and retained its FY25 inflation and growth projections at 5.4% and 6.5%, respectively.
India is hosting the 13th edition of Cricket World Cup. As cricket is a popular sport in India with a significant viewer base, consumption and media activity should likely benefit.

The 2023 monsoon season ended with rains at 94.0% of its long period average. Total acreage for Kharif sowing was higher by 0.2% YoY. This should help allay some fears on rural recovery. However, water reservoirs levels are low vs long term average, the sowing of the Rabi crop would need close monitoring.

India remains an oasis in the desert with economic activity remaining robust. Nifty valuations (one year forward P/E) remains close to long term averages. However, valuations for the mid and small cap indices remain above their long term averages. Going ahead, investors will likely look out for direction of global monetary policy, commentary from the management on demand in the festive season as well as the Q2FY24 earnings outcomes.”

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