Global Market Performance: The major US indexes reported stellar gains for 2024, recording a series of all-time highs. The S&P 500 surged 23.31% in 2024, on the back of 24.2% gain in 2023.The DJIA added 12.9% in 2024, while the Nasdaq has outperformed with a gain of 28.6%. The excitement around AI powered Nvidia which rose 171% while other Magnificent 7 stocks also posted strong gains. Since September, the Federal Reserve has reduced rates by 100 basis points, boosting confidence in the continuation of strong economic growth. Markets also experienced a sharp rally after Trump’s victory in November, fuelled by expectations of lower taxes and deregulation. Bank stocks in particular surged after the election, with JPMorgan and Goldman Sachs closing up about 41% and 48%, respectively. Shares of Tesla finished the year up more than 62%.
Indian Equities: Indian markets reported ninth consecutive annual gains in 2024 with the Sensex and Nifty returning 8.2% and 8.8%, respectively. Broader market indices such as the Nifty Midcap 100 and Nifty Small cap 100 outperformed the larger benchmarks, surging by 24%. A sharp sell-off by FPIs, particularly in the final quarter of the calendar year, put pressure on the markets. Weak earnings growth, combined with high valuations, depreciating rupee, and a strong rally in the US markets, negatively impacted market sentiments. FIIs selling abated to some extent in December compared to the previous two months as they sold equities worth Rs.656cr only. However, it should be highlighted that in December FIIs invested more than Rs.17,000cr in the primary market.
View on Indian Equities: We expect market to remain range bound with lot of volatility due to domestic as well as global events. Additionally, India earnings growth expectations remains muted with ongoing challenges such as slowing macroeconomic environment, weak earnings cycle, limited room for further valuation expansion, and the possibility of continued selling by FPIs. Our top picks are i.e. Shriram Fin. , Apl Apollo, Astral Poly., Kajaria Cera., Kirloskar Oil Eng., Birlasoft, City Union Bank, Neogen Chem & Greenply Ind.
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