Domestic mutual funds have infused the highest ever -- Rs 4.84 trillion -- this year amid strong inflows via SIPs.
Stock markets are likely to trade in a range-bound manner in a holiday-shortened week where trading activity of foreign investors, currency movement and global macroeconomic data announcements are expected to drive sentiments, analysts said. Several global markets may see subdued activity on account of Christmas and New Year holidays, an expert said.
Stock market investors this week would track the renewed tariff tensions between the US and China, domestic inflation data, besides, quarterly earnings from blue-chips HCL Tech, Infosys and Reliance Industries would also drive the momentum in equities, analysts said.
Emerging market equity funds struggled to attract fresh money last week and absorbed a mere net $ 265 million on account of outflows in commodity fund, says a EPFR report.
Equity returns may not be exceptional for the next two years, says Heather Brilliant, chief executive officer, Morningstar Australasia.
India is among the three least-favoured Asian stock markets, according to BofA Securities whose survey found that 10 per cent of fund managers are underweight on Indian equities from a 12-month perspective.
From the outcome of the general elections and then Union Budget to tepid corporate earnings in the September 2024 quarter (Q2-FY25), sticky inflation and Reserve Bank of India's stance on interest rates, extreme weather conditions, Indian stock markets have braved it all in calendar year 2024.
'The shifts in US involvement in global conflicts and geopolitical alliances could introduce uncertainties.'
'Geopolitics will be the most important driver of financial markets in 2025.'
'If you look at where inflation (headline and core) is today in India and where the rates are, there's clearly room to cut rates.'
Foreign investors have pulled out a massive Rs 22,000 crore from Indian equities so far this month, due to uncertainty surrounding the outcome of the Lok Sabha elections and outperformance of Chinese markets.
Just ahead of its mega FPO opening to public investors, Vodafone Idea (VIL) has announced closure of its anchor book allocation, raising about Rs 5,400 crore from marquee global as well as domestic investors, according to a statutory filing by the telco. This could be the third-largest anchor book after One 97 Communications and Life Insurance Corporation (LIC). One 97 Communications and LIC had raised Rs 8,235 crore and Rs 5,627 crore in the anchor round, respectively.
Investors' desire for companies to prioritise returning cash to shareholders through share buybacks, dividends or mergers and acquisitions (M&A) is at the highest level since July 2015, said a survey by BofA Securities (BofA). Nearly 30 per cent of respondents wanted companies to do so. As many as 226 respondents with $572 billion worth of assets under management (AUM) participated in the March fund manager survey (FMS), said BofA.
Japanese conglomerate Softbank's arm SVF Doorbell (Cayman) on Wednesday divested 3.8 per cent of its stake in supply chain company Delhivery for Rs 954 crore through open market transactions. Saudi Arabian Monetary Authority, City of New York Group Trust, Societe Generale, BNP Paribas Arbitrage, Morgan Stanley Mauritius, Baillie Gifford Emerging Markets Equities Fund were among the buyers of shares.
US-based boutique investment company GQG Partners has shot into limelight with its Rs 15,446-crore Adani wager.
The sharp rally in the broader markets has propelled India's market capitalisation (m-cap) to a new high. The combined m-cap of all BSE-listed firms rose to Rs 291.9 trillion in intraday trade on Thursday before settling lower at Rs 290.9 trillion. The previous record was on December 14, 2022, at Rs 291.3 trillion.
Indian equity markets have a limited upside potential in the near-term as they negotiate the ensuing cyclical slowdown, wrote analysts at Nomura in a recent coauthored report led by Saion Mukherjee, their managing director and head of equity research for India. He, however, believes that the foundations are in place for sustainable growth over the medium-to-long term, and hence suggests a 'buy on dips' strategy to equity investors. As an investment strategy, Nomura prefers domestic-oriented sectors and companies over exporters, and prefers stocks that provide valuation comfort. Industrials and banks are their overweight sectors, while IT services and consumer discretionary are their underweight sectors.
US-based boutique investment firm GQG Partners along with other investors on Wednesday bought an 8.1 per cent stake in Adani Power Ltd for over Rs 9,000 crore ($1.1 billion) as the marquee investor shrugged off damning report of a US short seller to invest in billionaire Gautam Adani's group.
The value of foreign portfolio investors' (FPI) holdings in the domestic equities reached $584 billion at the end of December 2022, which was 11 per cent lower from preceding year, according to a Morningstar report. This was largely on low return given by the Indian equities and exodus of foreign money from the domestic stock market. Going by the report, the value of FPIs investments in Indian equities dropped to $584 billion as of December 2022 as compared to $654 billion at the end of December 2021.
'India is an equity market with a breadth and depth of companies to invest in.'
10 non-bank and non-finance stocks from the BSE500 Index universe that offer an optimal blend of low valuation, reasonably robust revenue and earnings growth in recent quarters, a strong balance sheet, and most importantly, positive cash flow from their operations.
Don't exit from growth-style funds as they may benefit next from a shift in investor preference.
'Given the worries about sluggish growth, rising interest rates and likely volatility, it's quite logical to infer that the SIP route could be the preferred way of investing.'
'The potential headwind is that the Indian economy is likely to see a slowdown in growth rates over the next two years.'
Illustration: Uttam Ghosh/Rediff.com After a brief respite at the year's start, FPIs have dumped shares worth more than $5.7 billion (Rs 42,596 crore), taking the cumulative net outflows since October to $10.5 billion (Rs 78,466 crore), and adding to the volatility on the bourses. The figure would have been a lot worse had it not been for net purchases to the tune of $5.7 billion in the primary market from October to date.
The government is expected to defer the mega initial public offering (IPO) of LIC to the next financial year as the ongoing Russia-Ukraine war has dampened fund managers' interest in the public issue, market experts said on Sunday. The government was looking to sell 5 per cent stake in Life Insurance Corporation (LIC) this month, which could have fetched over Rs 60,000 crore to the exchequer. The IPO would have helped meet the curtailed divestment target of Rs 78,000 crore this fiscal.
Foreign investors continued to pull out large sums from the emerging market equity funds last week, with the Asian equity funds witnessing an outflow for the sixth week in a row taking the total exodus to over $18 billion so far is year.
'In 2022, active management, long-short strategies, multi-asset strategies, and asset allocation strategies need to be considered to meet long-term investment goals.'
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According to the BofA Merrill Lynch fund manager survey for October, investors are concerned that global economic recovery could falter, while emerging market confidence have started to rebuild.
Bulls might be on the rampage on Dalal Street but lofty valuations of the Indian equities present a reason for concern and the markets could perhaps witness up to 10 per cent correction, according to analysts. Benchmark indices have been on a record-breaking rally lately and August witnessed the stock market reaching many new highs. The BSE benchmark soared over 9 per cent last month.
Sanjay Kumar Singh suggests key factors investors need to keep an eye on while choosing the direct investment route.
Ruchir Sharma and Nandan Nilekani engage in an exciting conversation, with Vaihayasi Pande Daniel listening in. This is a final of a three-part feature.
Ruchir Sharma and Nandan Nilekani engage in an exciting conversation, with Vaihayasi Pande Daniel listening in. This is a second of a three-part feature.
Ruchir Sharma and Nandan Nilekani engage in an exciting conversation, with Vaihayasi Pande Daniel listening in. This is a first of a three-part feature.
'Today, there is no easy money to be made after the run-up in equities.'
India is a classic emerging market, which, with economic liberalisation, has unleashed a prolonged period of rapid economic growth.
This was the biggest weekly outflow from emerging market equity funds since early October and has taken the total outflow from these funds since the beginning of 2011 to $39.9 billion, EPFR said.
During the week ended November 9, emerging market equity funds attracted in $2.1 billion, marking the fourth straight week of inflows.
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