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Below Perspective On Markets By Mr. Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services

“The Indian stock market ended 2023 close to its highest levels ever. As the new year begins, there's been some nervousness, with a slight correction of 1-2% from Monday's peak. This week, various macroeconomic data from both India and globally will likely keep the markets volatile. A key event to watch is the release of the Federal Reserve's minutes, which may hint at the timing of potential rate cuts.

In some areas, valuations seem stretched, as seen in the surge of micro-cap stocks and the enthusiasm for new issues, including in the SME sector. The Nifty trailing PE stands at 23.4x, indicating a balance between not being overly expensive and not particularly cheap, especially considering the forecasted 12–14% earnings CAGR over the next two years.

This week, the Energy and Metals sectors have been prominent in market news, but no specific sector has significantly outperformed the overall market. Looking ahead, increased volatility might become more common as election season nears. However, factors like stable inflation and strong credit/GDP growth are positive signs for the market's health.”

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