Market Overview – June 2024
The IMF kept its 2024 global growth forecast at 3.2% and raised 2025 by 0.1 point to 3.3%.
Global economy and markets
- The IMF kept its 2024 global growth forecast at 3.2% and raised 2025 by 0.1 point to 3.3%.
- Growth appears to be steadying after the pandemic, conflicts, inflation and tightening, lowering hard-landing risk.
- US annual inflation in July fell to its lowest since March 2021, supporting expectations of a September Fed cut.
- Markets priced a 43.20% chance of the fed funds rate reaching 4.25–4.50% by end-2024.
Indian economy
- CPI inflation eased to 3.50% from 5.10%; GST collections grew 10.30%.
- Credit-card transaction growth slowed from 30.40% to 15.70%; personal loans grew 15.50%.
- Electricity grew 7.70% and core-sector output 5.30%; freight grew 14.20% and petrol consumption 8.50%.
- Passenger cars rose 12.70% and two-wheelers 17.50%; the monsoon was about 7% above average, supporting policy continuity.
Indian stock markets
- The Nifty 50 crossed 25,000 and the Sensex breached 82,000 for the first time, with the Nifty up 11% in three months.
- FIIs turned net buyers in June and July after heavy selling in May, while strong domestic retail inflows continued.
- The Nifty 50 trades at 22.8x TTM earnings, with PAT compounding 25%/18%/12% over 3/5/10 years.
- 6–7% GDP growth and stable macros support India’s premium valuation versus emerging-market peers.
Corporate performance (Q1 FY25)
- Nifty 50 Q1 FY25 revenue grew 9% and PAT 6%, the lowest PAT growth since September 2020.
- Banks, Auto, Infrastructure, Capital Goods, Pharma and Energy drove earnings, most with double-digit revenue and EBITDA growth.
- Auto ancillaries, Consumer Durables, NBFCs, Real Estate, Industrials, Textiles and Defence also performed well.
- Without a top-line recovery, the 15–16% FY24–26 consensus EPS growth for the Nifty 50 is at risk.
Outlook
- Liquidity has driven the rally; US unemployment data, geopolitics and an unwinding yen carry trade could trigger a correction.
- Markets may consolidate, and further triggers are needed before the next leg up, though Q1 FY25 results were acceptable.
- We remain stock-specific and will use deep corrections to deploy funds.
Disclaimer. This overview reflects the views of the Care PMS investment team at the time of publication and is for information only. Investments in equities are subject to market risk. Past performance is not indicative of future returns. Please read the disclosure document carefully before investing.
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