BENGALURU: India’s stock market will hit new highs over the next six months and rise more than 10% from here to the end of 2024, driven by continued expansion in the fastest-growing major economy, according to a Reuters poll of equity strategists.
The same strategists also said in response to an additional question that stocks that have lagged overall equity performance in recent years as investors chase technology and other stocks will outperform growth stocks.
The benchmark BSE Sensex index hit an all-time high of 67,927.23 in September, registering the longest streak of gains in 16 years. The index has fallen about 3% since then but is still up about 8% for the year.
While this run makes India one of the best-performing markets – the BSE index has risen in nine of the last 10 years – it also makes it expensive compared to regional peers and other major indices.
BSE’s current price-to-earnings ratio of 21.45 was second only to the US S&P 500 ratio of 23.11, according to LSEG data.
But still nearly 90% of analysts, 22 out of 25, who answered an additional question in the November 10-22 survey said Indian stocks will hit record highs in the coming six months.
The Sensex is expected to rise 6% from Monday’s close of 65,655.15 to hit a high of 70,000 by mid-2024, an upgrade from 68,578 in the August survey.
It was projected to grow 3.6% to 72,500 by the end of 2024, according to the average forecast of 29 analysts.
India’s economy is the fastest growing among major economies and is expected to grow by more than 6% over the next few years. This is likely to give rise to domestic equities.
“It was a good year for growth in Indian markets and next year we should see some moderation in growth. But having said that, I think India remains one of the favorite markets,” said Rajat Aggarwal, Asia equity strategist at Societe Generale. It is made.” ,
“Growth has been resilient and macro momentum has been strong and this should remain the case in 2024.”
The strong surge in domestic equity prices could be due to the growing number of young Indian investors, fueling the boom at a time when the country has overtaken China as the most populous country in the world.
“The combination of better financial literacy and increased access to financial services has led to an increase in mutual fund accounts (typically used by retail investors), which increased from less than 60 million in 2016 to less than 60 million in 2016,” said Shilan Shah, deputy head of EM. Now it has exceeded 150 million.” Economist in Capital Economics.
When asked about expectations for corporate earnings in the coming six months, all 27 respondents said they would increase.
“Earnings have actually grown more than 20% this year. So we already have a high base. I think earnings should grow, but realistically we may not get the kind of growth that we have,” Agarwal said. Saw it last year.”
Two-thirds of 16 out of 24 analysts said value stocks will outperform growth stocks in the coming six months.
“In an environment where interest rates are high, or are expected to go higher if not higher, value is generally better,” said Nishit Master, portfolio manager at Axis Securities.
“We’re not going to go back to 0% interest rates or 1% or 2% global interest rates any time soon. And if that’s the case, value will continue to perform well.”
nifty 50 The index was projected to rise 5.6% from Monday’s closing level of 19,694 to 20,800 by mid-2024 and 21,840 by the end of 2024.
The same strategists also said in response to an additional question that stocks that have lagged overall equity performance in recent years as investors chase technology and other stocks will outperform growth stocks.
The benchmark BSE Sensex index hit an all-time high of 67,927.23 in September, registering the longest streak of gains in 16 years. The index has fallen about 3% since then but is still up about 8% for the year.
While this run makes India one of the best-performing markets – the BSE index has risen in nine of the last 10 years – it also makes it expensive compared to regional peers and other major indices.
BSE’s current price-to-earnings ratio of 21.45 was second only to the US S&P 500 ratio of 23.11, according to LSEG data.
But still nearly 90% of analysts, 22 out of 25, who answered an additional question in the November 10-22 survey said Indian stocks will hit record highs in the coming six months.
The Sensex is expected to rise 6% from Monday’s close of 65,655.15 to hit a high of 70,000 by mid-2024, an upgrade from 68,578 in the August survey.
It was projected to grow 3.6% to 72,500 by the end of 2024, according to the average forecast of 29 analysts.
India’s economy is the fastest growing among major economies and is expected to grow by more than 6% over the next few years. This is likely to give rise to domestic equities.
“It was a good year for growth in Indian markets and next year we should see some moderation in growth. But having said that, I think India remains one of the favorite markets,” said Rajat Aggarwal, Asia equity strategist at Societe Generale. It is made.” ,
“Growth has been resilient and macro momentum has been strong and this should remain the case in 2024.”
The strong surge in domestic equity prices could be due to the growing number of young Indian investors, fueling the boom at a time when the country has overtaken China as the most populous country in the world.
“The combination of better financial literacy and increased access to financial services has led to an increase in mutual fund accounts (typically used by retail investors), which increased from less than 60 million in 2016 to less than 60 million in 2016,” said Shilan Shah, deputy head of EM. Now it has exceeded 150 million.” Economist in Capital Economics.
When asked about expectations for corporate earnings in the coming six months, all 27 respondents said they would increase.
“Earnings have actually grown more than 20% this year. So we already have a high base. I think earnings should grow, but realistically we may not get the kind of growth that we have,” Agarwal said. Saw it last year.”
Two-thirds of 16 out of 24 analysts said value stocks will outperform growth stocks in the coming six months.
“In an environment where interest rates are high, or are expected to go higher if not higher, value is generally better,” said Nishit Master, portfolio manager at Axis Securities.
“We’re not going to go back to 0% interest rates or 1% or 2% global interest rates any time soon. And if that’s the case, value will continue to perform well.”
nifty 50 The index was projected to rise 5.6% from Monday’s closing level of 19,694 to 20,800 by mid-2024 and 21,840 by the end of 2024.
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