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As investors prepare for the year ahead, there are several key considerations to keep in mind to navigate the evolving economic landscape and financial market. Experts tell us what these are and how to protect your investment in 2024.
One of the much talked about interesting trends for the year is a significant reduction in the Foreign Institutional Investors (FIIs) holding in our markets. At present, of the total Indian market cap of US$~4.33trillion, FII holding is US$~656billion or ~15%. This will be one of the lowest FII holdings in our stock markets in the last 10 years plus. To put it in context, in 2012 the FII holding was ~25%.
Devina Mehra says: “We want to track the FII flows is because we think it determines the direction of the market. But if you actually look at data over years, over months, whatever cut you want to take, the FII flows have very little correlation with the market movement, in fact, none at all. I mean, this was the case even when the domestic mutual fund and the domestic retail investor community was not that large. ”
"The election results, if turned out as expected, would cement the sentiment and the market would look for continued impetus towards infrastructure spending and policies from the government that nurture growth of the economy. Earnings would also be a major driver of the direction of the markets going forward. With Nifty 1-yr forward PE trading at 21.35x currently, there is an expectation for growth in earnings."
“The emerging market currencies such as India will be doing much better this year and that is an ideal environment for foreign flows to come into emerging markets and in India. While we have had a stellar CY23, CY24 should continue with that strength and we should be expecting strong double digit returns for the Indian markets in CY24, unless something goes terribly wrong globally.”