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Aside from banks and IT, Quantum MF is also positive on the medium-term prospects of Indian equities. However, the mutual fund names foreign flows, a revival in private capex and recovery in mass segments as the three key triggers that will guide the Indian market through 2024.
Sridhar Sivaram says: “We will see manufacturing as the next big theme for India like what happened to auto ancillary. 20 years back, we were just an assembly unit in India. And today, 95% is manufactured within India. The sceptics say that, oh, this is just an assembly unit, not more than 10%. But that is changing. Maybe in the next three years, we will go to 30% manufactured or value added in India.”
FPIs’ contribution to the institutional flow at 73% in December increased sharply from 10% a month ago and 34% a year ago reflecting a change in stance. After selling heavily during the first half of 2023, FPIs deployed Rs 66,134 crore in December alone. It was their highest monthly inflow, surpassing the previous high of Rs 62,016 crore in December 2020. FPIs had invested Rs 9,000 crore in November 2023 in domestic equities.
Shibani Sircar Kurian says: “So far earnings have been predominantly led by domestic businesses, which are still holding up well. The second sector, which has also been a key contributor to earnings has been the banking sector. Incrementally, we are seeing some degree of margin pressure and therefore, you need to moderate earnings from that perspective.”
The unprecedented win streak has pushed Indias stock market valuation above $4 trillion for the first time, closing in on Hong Kong. Survey respondents pointed to inflows from overseas investors, who have bought $20 billion worth of Indian stocks on a net basis so far this year, reversing a record withdrawal in 2022.