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Market outlook from the FII inflows side

Market outlook from the FII inflows side


Category : Knowledge Center

Introduction: Market experts suggest that the stocks of capital goods companies are expected to perform well in the long term after a period of low activity. This is based on technical analysis, which looks at historical price patterns and indicators. The expectation is that foreign investors will increase their buying activity in industries like capital goods, finance, and construction. It is also expected that foreign investment in India will continue to grow. In April, India became a popular choice for foreign investors due to global stability and reduced concerns about banking issues in the US and Europe. Market experts recommend starting investments in the IT sector, as it is expected to have strong growth and currently offers attractive valuations.

Effect of global event on upcoming market: Market experts are saying that right now, inflation is a bigger concern than economic growth in the world. Sticky inflation means that prices are rising and staying high, which is causing problems. Governments are raising interest rates to try to control the inflation, but this can also hurt economies that are already struggling. On top of that, any increase in tensions between countries can make people nervous about investing in the stock market. So, it is important to keep an eye on these issues because they could have an impact on the economy soon.

Experts take on upcoming Fed Policy: Market experts says that it is expected that the Federal Reserve will not increase interest rates at its meeting in June, which is a change from its previous pattern. The Fed has been raising rates to control inflation and prevent a downturn in the economy, but now it may take a break. There is a possibility that the Fed could even lower rates later this year. During the meeting, the Fed will also update its predictions for long-term economic growth, including things like GDP growth, unemployment rates, and inflation. This meeting is important because it will give us clues about what central banks around the world and investors might do in the future. Despite some signs that inflation is slowing down, it is still higher than the Fed's target, so this meeting could help us understand what actions the Fed might take next.

Experts view on Q4 earning sessions: Market experts are saying that Indian companies surprised investors by reporting better-than-expected earnings for the March quarter, despite global uncertainty. This was mainly due to lower input costs, which improved profit margins. The financial and automotive sectors performed particularly well, indicating strong growth. Despite higher interest rates, consumer demand remained strong. The IT sector faced some challenges, but smaller IT companies exceeded expectations and provided positive outlook for the next financial year. Rural sectors are recovering, although urban demand is still stronger. Consumer goods and restaurant businesses experienced little to no growth, as high inflation caused prices to rise and consumers to buy cheaper alternatives.

Experts view on upcoming quarter earning sessions: Market experts are saying that the Indian stock market had a good month in April, with a 4.5% increase, despite some mixed economic news earlier in the year. The decision by the central bank to not raise interest rates was seen as a positive move, and both factors are expected to have a significant impact on the future of the stock market. The outlook for future growth has become more moderate due to lower-than-expected results in the IT sector and a slowdown in global business spending. However, inflation has decreased, which is good news for interest rates, and there is hope that interest rates may be cut. India is seen as a promising region with healthy growth compared to the global economic slowdown. The government, central bank, and technology infrastructure have shown resilience and adaptability after the COVID-19 pandemic. The banking crisis has been effectively addressed, resulting in strong financial positions for banks, governments, individuals, and companies. Although there may be challenges in the first half of the year, the latter part is expected to see a significant rebound in earnings growth. Companies that have invested wisely in technology are experiencing stronger growth compared to others in their sectors, and this trend is expected to continue. The second half of the year could mark the beginning of a sustainable, long-term growth period for India and its companies.

Experts view on FII inflow on upcoming month: Market experts says that foreign investors are feeling positive about investing in India this year after withdrawing money in the past. The US Federal Reserve's monetary policy may cause some uncertainty, but overall, India is seen as an attractive investment destination among emerging markets. The recent stabilization of the global situation and reduced concerns about banking issues in the US and Europe have contributed to this. The value of Indian stocks has become more reasonable, which has caught the attention of foreign investors. Compared to other emerging markets, India is seen as a stable economy, and investors are willing to pay more for the potential of good returns in the long run. As a result, industries like capital goods, financials, and construction are expected to see increased investment, and the inflow of foreign investment is likely to continue in the coming months.

Experts’ views on IT space: Market experts are saying that the IT sector has been facing challenges due to economic problems in the US, which has led to project cancellations and budget cuts. This has caused the sector's valuation to decrease. However, there are signs of improvement in the US economy, which is good news for the banking and finance sector. Indian software and tech companies depend on this sector for their revenue. Additionally, the Indian midcap IT segment has shown strong growth, and there is a positive outlook for the sector. The recommendation is for clients to invest in the IT sector now because it is expected to grow and is currently priced attractively.

Experts view on Capital goods and Insurance: Market experts suggests that stocks in the capital goods sector are expected to do well in the long run after a period of low activity. Many stocks in this sector are already showing positive movement, and the sector is showing strong momentum. This is mainly due to increased government spending on infrastructure projects, which will benefit companies in the capital goods sector. Additionally, stable commodity prices and improved manufacturing capacity after COVID-19 restrictions have been lifted are expected to boost profitability in these companies. On the other hand, the insurance sector has experienced a slight slowdown due to higher interest rates and decreased optimism. However, there is still significant potential for long-term growth in the insurance industry, considering the low number of people currently having insurance and the large population. In the short term, there may be slower growth for a few quarters. To maintain growth and profitability, insurance companies will need to adjust their product offerings or increase policy sales. While growth is expected to continue in 2023, insurance companies will need to focus on managing growth, distribution costs, and maintaining attractive products in the next fiscal year. Overall, it will be a challenging year for insurance companies to balance growth and profitability.

Conclusion: In summary, the experts believe that the capital goods sector is poised for long-term growth, while the insurance sector may face some short-term challenges. Global events, the Federal Reserve's policy decisions, and quarterly earnings reports are important factors to watch. The outlook for the Indian stock market is positive, with increased foreign investment and opportunities in the IT sector. So, open your demat and trading account with Libord and start investing in these sectors as this time is supposed to be the best time to invest in market.

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