4 factors to shape Indian mkt in 2024: Tarun Birani

“Several factors could shape this trajectory, including 1) global economic conditions, 2) domestic interest rate movements, 3) inflation trends, and 4) the outcome of the upcoming Indian Lok Sabha elections,”says Tarun Birani, Founder and CEO – TBNG Capital Advisors.

In an interview with ETMarkets, Birani said: “As we approach 2024, we need to balance optimism with a cautious evaluation of market fundamentals,” Edited excerpts:

We are in the last month of the year 2023. Any key learnings that you would like to share?

Reflecting on 2023, it’s been a remarkable year for the Indian stock market. Despite a global economic slowdown, our market not only rallied but reached historic highs.

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What’s fascinating is the role of our young, risk-taking population and their increasing participation in equity funds. It’s a testament to the growing financial literacy in India.

Additionally, the global context of central banks potentially easing their aggressive interest rate hikes has made our market even more attractive.

However, it’s important to stay vigilant as high valuations could lead to a period of consolidation.

Indian M-cap hit $4 trn market in November – we are now 5th biggest market in the world. What is fueling the rally and are we in the race to become top 3?

Achieving a $4 trillion market cap and becoming the 5th largest market globally is a landmark moment. This growth is fuelled by a combination of resilient economic growth and robust domestic investment flows which was compounded by Foreign Inflow as well as towards the latter part of the Calendar Year as yields eased up somewhat.

Looking ahead, the challenge will be to sustain this momentum, especially considering the premium valuations compared to our peers.

As we approach 2024, we need to balance optimism with a cautious evaluation of market fundamentals.

As the size of the economy will expand along with better participation in Capital Markets, we can see a further upward trajectory from hereon. But in the short term, it’s important to be mindful.

Charlie Munger passed away at 99. Any anecdote or lessons you would like to highlight?

The passing of Charlie Munger at 99 is a significant loss to the investment community. His wisdom transcended beyond finance into real life.

Munger emphasized rationality, the power of continuous learning, the true meaning of financial freedom, and the importance of integrity in business.

His criticism of the investment industry’s overemphasis on fees over value, his advocacy for concentrated bets over excessive diversification, and his strategy of avoiding stupidity rather than just seeking brilliance are lessons that will continue to guide all of us in the future.

How does the market look in 2024? Any big headwinds that investors should watch out for?

Looking at 2024, the Indian stock market could continue to do well provided we sustain our robust economic growth, the fastest among major economies.

However, several factors could shape this trajectory, including 1) global economic conditions, 2) domestic interest rate movements, 3) inflation trends, and 4) the outcome of the upcoming Indian Lok Sabha elections.

These elections, in particular, could introduce policy shifts affecting market sentiment. While markets will absorb the results of these Elections in the long-term, but in the short-term, i.e. especially the first half running upto the elections, there could be some wait-and-watch employed by participants and seasoned investors alike.

November was the month of IPOs for both mainboard and SME – how should retail investors decide which one to pick?

The IPO landscape in November 2023 was quite dynamic, investors should approach IPOs with a thorough understanding of the company’s prospects and market conditions. Not all IPOs are equal, and discernment is key in these decisions.

The choice between Mainboard and SME IPOs must be carefully made in right awareness. Mainboard IPOs represent well-established companies, whereas SME IPOs offer growth potential but come with higher risks and entry barriers.

As an investor, one needs to evaluate the company’s financial health, growth prospects, and market stability.

With SME IPOs, there’s a unique opportunity to be part of a company’s growth journey, but it requires a keen understanding of the sector and risk tolerance.

Which sectors are looking attractive for the year 2024?

As we navigate the landscape of a burgeoning economy poised to hit a pivotal moment in per-capita income, it’s challenging to pinpoint specific short-term sectoral bets. However, considering India’s demographic dynamics, a few multi-year themes and sectors appear promising.

The country’s youthful population, with their escalating aspirations, is likely to steer demand towards quality and luxury goods.

This trend, coupled with enduring themes like Banking, Quality Asset Management Companies (AMCs), Healthcare, and Insurance, points to potential growth areas.

Additionally, select mid-cap and large-cap stocks in the IT sector are emerging as attractive. However, it’s important to note that this sector faces certain headwinds that need to be addressed.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

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