New Delhi, 7 March (IANS). India’s long-term outlook remains strong and the investment cycle is estimated to move towards a rapid growth in the medium period, which will get support from government investment in infrastructure and manufacturing, boom in private investment and real estate cycle recovery. This information was given in a latest report of HSBC released on Friday.
HSBC Mutual Fund’s ‘Market Outlook Report 2025’ is expected to become a more meaningful part of the global supply chain to support more private investment in renewable energy and its associated supply chain, localization of high-end technology components and rapid development of India.
“After the recent improvement, the valuation of the Nifty is now in line with an average of 5/10-year. We remain creative on Indian equity supported by Outlook, a more strong medium term growth Outlook.”
The Nifty is now trading on 18.1 times, One-age forward price to earning ratio. It is now 7 percent less than its 5-year average and corresponds to its 10-year average.
After rapid improvement in January and February, there has also been a decrease in valuations in midcap and smallcap space.
According to the report, global macro environment remains challenging due to geopolitical and economic uncertainties.
For India, the GDP growth rate in the third quarter of FY 2025 has improved to 6.2 percent on an annual basis.
The report said, “We believe that the government has tried to partially address the recession in private consumption through income tax rate cuts in the Union Budget. However, increase in private capital expenditure will be significant as government capital expenditure is decreasing.”
The capital expenditure of the central government is now expected to increase by 7 percent on an annual basis in FY 2025 and 10 percent in FY 2026 on an annual basis.
RBI is also trying to reduce policy rates.
“We believe the long -term outlook remains strong.”
Regarding the Date Outlook, the report stated that after the rapid decline in January, the currency level in the currency level improved the policy steps of the RBI – FX purchase/sales USD swap window.
The report estimates, “The real economy has shown flexibility towards global development so far. Development-liberty data, MPC’s previous policy action and minutes of MPC, we believe that RBI-MPC will deduct another 25 BPS in its April policy, while continuing to remain tight and flexible on its liquidity strategy.”
For the third rate cut, inflation, monsoon outlook and global development will be the major inputs visiting the June policy meeting.
-IANS
SKT/ABM
