The month that was: October 2023

During the month of October Global equity markets were under pressure amidst rising yield on US Government Securities and geopolitical tension in Middle East region. S&P500 index posted a loss of 2.8% during the month while UK fell by 3.7%. Owing to negative global cues and selling by FIIs, Nifty50 Index fell 2.8% during the month. Midcap index also witnessed profit booking resulting in a fall of 4.1%. Among the sectors, real estate gained while power, healthcare and metals declined the most. India's Sep CPI inflation dropped to 5% from 6.8% in Aug, due to fall in vegetable prices. FIIs sold net USD 3 bn worth of Indian equities while DIIs bought USD 3.3 bn during the month.

Market Outlook

Geopolitical tension has come to the fore during last few weeks affecting investor sentiments adversely. In the near term, this factor could act as an overhang on global equity markets. Even though Indian markets have also been affected via FII outflow and fears of rising crude oil prices, domestic macro parameters remain stable which should augur well for our markets over medium term. Domestic liquidity in terms of SIP flow into equity mutual funds are touching 17k crore per month which provides support to Indian markets. Festive led consumption, ongoing recovery in capex cycle and supportive government policies should lead to corporate earnings growth of 15-20% in FY24. We stay positive on Indian equities over medium term owing to structural levers of Indian economy and like sectors such as Financials, Consumption, Cement and Capital Goods which should benefit from consumption growth and capex recovery.

Happy Investing!!