ETMarkets Smart Talk: Largecap stocks likely to deliver 11-13% return in next 12 months in line with nominal GDP growth: Pradeep Gupta

economictimes.indiatimes.com:

“We expect nominal GDP growth of 10% to 11% in the next 12 months, which should be in line with 11% to 13% return for large cap indices,” says Pradeep Gupta, Co-founder & Vice-Chairman, Anand Rathi Group.

In an interview with ETMarkets, Gupta said: “Market timing and the selection of specific instruments within an asset class explain only about 10% of portfolio return variability” Edited excerpts:

October is turning out to be a roller coaster ride for investors in equity markets. Will geopolitical concerns have a long-term impact on equity markets if things escalate?
Major indices across the globe witnessed sharp volatility in the past couple of weeks due to the rising Israel-Palestine war. In the same week, we witnessed the U.S. stock-index futures fall over 0.5%, Nifty was down ~140 bps pts.

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On the market open and then we witnessed a bounce back again the same week. On a short-term basis, there are expectations of bond yield spiking as volatility in the equity markets may continue and inflation hardens with the jump in oil prices.

India imports around ~80% of its crude oil requirement, thus any short-term spike in crude oil prices will impact the inflation outlook and put pressure on imports.

The price of crude oil has soared 6.40 per cent to over $90 per barrel on 16th October’23, against $84.58 on 6th October’23.

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