Category: Money Trends

Domestic equity markets remained volatile during the month under review as markets rose initially after the former U.S. President and Republican candidate took a decisive lead in the 2024 U.S. election, which increased the expectation of tax cuts and increased government spending in the U.S. However, the trend reversed as sentiment was weighed on concerns over potential impact of the newly elected U.S. President’s protectionist policies on the global economy as investors awaited clarity on the President’s policy proposals on global geopolitics, U.S.- China relations, NATO, immigration, and economic policies.

Explore key trends and performance insights shaping the quarterly market landscape.

October proved challenging for domestic equity markets, as mounting concerns over the Middle East conflict led to a broad decline across all sectors. Sectoral indices reflected this downturn, with each registering losses over the month. However, on a calendar-year-to-date (CYTD) basis, the pharmaceutical sector stands out as a resilient performer, showing the strongest returns amidst market volatility. The downward trend wasn’t limited to India; global equity markets also experienced a similar slide, impacted by international uncertainties.

Valuations remain elevated but are expected to normalize as earnings growth catches up. The market may not see the PE expansion witnessed earlier; rather, it could trade in a narrower PE range of 18x-22x, depending on how corporate earnings evolve.

Domestic equity markets started the month on weaker note amid weak global cues as sentiment was dampened following weak U.S. manufacturing data of Aug 2024, which reignited concerns over an economic slowdown in the world’s largest economy.

Domestic equity markets started the month on weaker note on concerns over a potential economic slowdown in the U.S. because of lackluster economic indicators such as sluggish job growth, increased unemployment rates, and disappointing corporate profits. Losses were extended due to Yen carry trade issue following the Bank of Japan’s decision to raise its interest rate from 0.10% to 0.25%.

Domestic equity markets rose during the month amid reinstated expectations that the U.S. Federal Reserve would start interest rate cuts in Sep 2024 following the dovish commentary from the U.S. Federal Reserve Chairperson.

Domestic equity markets initially witnessed volatility as the outcome of the general elections did not come in line with market expectations. However, markets rebounded sharply on hopes of political stability and policy continuity. 

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Union Budget 2024-25 focused on the path of fiscal consolidation. Building consistency to align the teax regime as widely expected.

Domestic equity markets fell as market participants exercised caution and remained on the sidelines as they awaited the outcome of the general elections for 2024.