Outlook 2024: How equities, gold and crude oil will perform next year

livemint.com:

BSE Sensex exceeded 71,000 levels. Both indexes recorded a gain of around 18% in CY23YTD. Additionally, the Nifty Midcap index and Smallcap index outperformed, registering gains of approximately 43% and 52%, respectively, during the same period.

This exceptional performance reflects resilience in the face of various global and economic uncertainties. Brokerage house Kotak Securities has come out with outlook for equities, gold and crude oil for the upcoming year. Let's see what it predicts.

In the current market scenario, the brokerage believes large-cap stocks offer a better reward-risk balance. This preference is based on their more reasonable valuations compared to the lofty valuations observed in many mid-and small-cap stocks. The brokerage also pointed out that over the past 6-12 months, investment stocks have shown robust returns, driven by expectations of a strong recovery in the domestic capital expenditure cycle.

The narrative has been supported by substantial government capex in the first six months of FY24. However, two risks associated with this narrative are worth noting. First, there is a possibility of front-loading government capex in FY24.

Second, the financing of capital expenditure through large fiscal deficits may not be sustainable, given the high fiscal deficit, it cautioned. Given the rich valuations in the broader market, the brokerage advised investors to strategically add quality stocks with attractive valuations from a long-term investment perspective. This approach considers the correction as a chance to acquire fundamentally sound assets at more favorable prices.