Market momentum may continue in 2024; FPI money will continue to pour into India, says Ajit Banerjee

livemint.com:

Ajit Banerjee, Chief Investment Officer of Shriram Life Insurance Company says he is positive about the domestic market for 2024 and expects the foreign capital inflow to continue. Edited excerpts: Indian markets have undisputedly been one of the best-performing markets in the world in the calendar year 2023 (CY23).

Over the last year, the large caps have delivered around 15 per cent returns and mid and small caps around 40 per cent returns. Given the government's thrust on infrastructure development, indigenisation of the defence sector, and developing India into Atmanirbhar Bharat, PSUs as a segment have given 70 per cent returns which is phenomenal.

With the positive global cues coming in the form of the Fed starting their rate cut cycle in the first half of the calendar year 2024 (H1CY24), commodities prices continuing to ease, state elections overhang behind us and stable central government likely to be formed in FY25, so much of the positives seem to have been built in and market rallying accordingly. As the positive momentum is expected to continue in 2024 with rate cuts starting, FIIs will continue to invest in the Indian market duly supported by DII and Retail participation the market rally will continue.

However, since most of the positives have been factored already in 2023 even though we can expect the market to be positively biased, the quantum of returns may not be to the magnitude of 2023 levels. Apart from this we also have to see how recession sets in in developed countries like the US, and Europe, economic recovery takes place in China and last but not least geopolitical crisis takes a turn.