Nifty Can See 5% Upmove In Early 2024 On Rate-Cut Hopes: Market Veterans

The initial euphoria over the US Federal Reserve's indication of rate cuts in 2024 will not be over in a day but rather remain for a long time, according to investors.

There can be a 5% upmove in the first quarter of 2024 and the NSE Nifty 50 can cross the 22,000 mark as well, according to Andrew Holland, chief executive officer of Avendus Capital Pvt.

Holland underscored that large-cap and banking stocks could lead the rally in the Indian markets.

The financial segment will likely see strong growth for the longest time, according to Mihir Vora, chief investment officer of Trust Mutual Fund.

India's domestic-growth story remains strong in the backdrop of the possibility of rate cuts in the US pulling the dollar and Treasury bond yields down, Vora told NDTV Profit's Niraj Shah.

"Inflation expectations are coming down sharply and US growth seems to be holding better than expected. That's a much more benign scenario for India. To the extent that we may not have fully priced in the positiveness," he said.

The Union government is aiming for 7–8% growth. Infrastructure, capital expenditure and real estate segments are going to get a boost as the consumption and service sectors are not supportive of such kind of economic growth, according to Vora.

He said the government's recent moves with the production-linked incentive scheme, infrastructure building and defence shifted the limelight on these segments in the last two years.

Stocks in the physical asset-creation segment are mostly in the mid-cap and small-cap categories. If anyone wishes to stay invested in them for longer, they cannot avoid these indices, Vora said.

He sees fresh fund flows coming in certain pockets of valuation, such as construction, due to the kind of growth the country is envisioning.

In terms of fresh inflows of foreign funds into the Indian markets, Holland pointed out that China is required to stabilise, which will ultimately result in a lot of inflows into the market.

Vora highlighted that the public-sector banks caught up to private lenders in terms of valuation over the past year and cleaned up their balance sheets as well.

He cautioned about the non-banking financial companies, which are concentrated in retail lending, due to a recent move by the Reserve Bank of India to increase the risk weightage of unsecured loans.

On the asset-allocation strategy for retail investors, Vora said both fixed-income and equities look attractive.

Long-term equities remained attractive, as investing at the peak of the cycle still delivers 8% growth, he said.