Investec sees 90% probability of a market correction in 2024; check top stock picks
₹10 lakh crore between FY20-FY23," explained the brokerage. It continues to remain ‘overweight’ on Industrials, Autos, Financials and Pharma and prefers ICICI Bank, Kotak Bank, Bajaj Auto, and Cipla in largecaps, and Delhivery, Equitas, AngelOne, Policy Bazaar, Exide, and Petronet in mid/smallcaps. The Indian equity market has consistently outperformed over the past decade as well as in the last one year.
The brokerage informed that in the past decade, the Nifty index has jumped 11.7 percent in dollar terms. Only US markets (up 12.6 percent) have outperformed Nifty in this period. Similarly in the last 1 year, the Nifty index has advanced 20.8 percent versus a 22.1 percent jump in US markets.
All other global peers have underperformed the Indian equities in this time period as well, further highlighted Investec. The brokerage pointed out that in the past 33 years, Nifty has corrected more than 10 percent in 29 years (a probability of 88 percent). However, a correction of more than 20 percent while frequent in 2000s, has already become rare – since 2010, this has happened only once in 2020, added Investec.
Furthermore, it observed that the only market crashes (over 30 percent decline) in the 21st century have their origin outside India – 2008 (GFC), and 2020 (COVID). These crashes (2008 & 2020) are typically the result of a major imbalance accompanied by a massive inflation in valuation. Both those conditions are largely absent today in India, although we remain exposed to external shocks, noted the brokerage.
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