Category: Money Trends

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. 

Domestic equity markets rose during the month as India’s strong economic growth outlook, anticipation of upbeat corporate earnings for the quarter ended Mar 2024 and the prospects of political stability following the outcome of general elections kept the underlying sentiment positive. The rally in the domestic equities took a breather in the interim as escalating geopolitical tensions between Iran and Israel dented market sentiment.

The BJP’s Manifesto for the 2024 General Elections bodes well for Indian equities, with a strong emphasis on continuity in reform efforts while maintaining financial macro stability. Anticipated to dominate the upcoming polls, the Party’s agenda highlights key sectors poised for growth. Direct beneficiaries include Capital Goods (railways/defence), Housing/Mortgages, Tourism, and Aviation, with Textiles and Pharma API also expected to gain with a preference for infrastructure and manufacturing sectors, particularly focusing on SMIDs.

Continuity in maintaining fiscal and current account stability is underscored in the manifesto, reflecting the BJP’s conservative approach. This commitment is crucial for sustaining India’s macroeconomic growth.

The manifesto also pledges to continue the state-led infrastructure development drive, aiming to construct over 5,000km of railway tracks annually and expand access-controlled highways by 15,000km. Additionally, there’s a focus on EV charging infrastructure and green initiatives, including the ambitious target of 500GW of renewable energy. Affordable housing receives attention, with plans to strengthen RERA and develop satellite townships while addressing slum replacement and the PM-AWAS scheme. Clarification on funding for infrastructure projects, likely through asset monetization, is expected in the upcoming budget.

Furthering the manufacturing agenda, the BJP aims to establish global hubs for autos/EVs, electronics/semiconductors, and railways, while emphasizing defense manufacturing localization. Textiles and pharma API sectors are highlighted for growth potential. The aviation hub is also set for strengthening. Manufacturing companies are expected to benefit from coordinated policy support and supply chain diversification trends, favoring asset-heavy players.

In the social sector, the BJP prioritizes outcome-based strategies over subsidy-driven approaches. Focus areas include improving quality of life through piped water and LPG connections, achieving zero electricity bills through renewable energy, and lowering healthcare costs through state insurance schemes. Efficiency in spending is emphasised to maintain fiscal balance without increasing expenditure risks.

Domestic equity markets rose during the month under review as market participants remained optimistic regarding the growth prospects of the domestic economy after the Indian economy witnessed a faster-than-anticipated growth rate in the quarter ended Dec 2023.

Domestic equity markets rose during the month under review as market participants cheered the outcome of the Interim Union Budget 2024.

Domestic Equity markets witnessed considerable volatility during the month under review