Stock Market Outlook: Five Things To Watch Out For This Month - Brokerage View

Asset Management company Mirae Asset gave an outlook for the stock market for the first half of the financial year 2024-2025.

The firm said that while the first half of FY25 will be challenging the second half could see recovery.

Prospect Of A Good Comeback

According to experts, the slowdown of the second quarter of this fiscal is fairly priced in and looking at prospective trends, there is a prospect of a good comeback.

This will be led by agriculture, as the kharif crop and price outlook is favourable and the rabi crop is also likely to be positive. The government capex is also likely to pick up in the second half of this fiscal.

While rural consumption can offset the softness in urban consumption and this too presents a positive picture with the ongoing harvest and commencement of the next season.

The first half of FY25 was impacted by adverse weather and lower wedding dates, but both weather and weddings have normalised in the second half of FY25 which will also drive recovery in footfalls.

Long Term Story

While near term concerns have risen and could weigh on investor sentiments, medium to long term India's story remains intact.

Additionally, India's macros including fiscal consolidation, strong balance sheets, recovery in consumption remain strong, amidst slowing global growth. Further, India's long-term growth prospects steady, projected at 6.5% real GDP growth and 10-11% nominal GDP growth.

The strength of bank's NPAs or non performing assets is below 1% and corporate balance sheets are also notable.

India Inc.’s profits are growing strong, but they are also generating large amounts of free cashflows in sharp contrast to 2003-2008, where free cashflows were in deficit.

Household debt levels are also reasonable as compared to global standards. India's aggregate debt to GDP is lower than in 2010, while it has risen globally.

Five Factors To Look Out For

The five factors that investors will have to look out for are as follows:

• Rate trajectory by the central banks
• US policies post new administration
• Oil price trend
• Geopolitical issues and
• Revival in consumption
• Upcoming Union Budget