New Delhi, November 10 (IANS). India’s mid-term growth outlook remains positive with improving private capital expenditure and strong consumption. According to a report on Monday, with these factors, a strong recovery was recorded in equities in October last month also.
A latest report from HSBC Mutual Fund said that Nifty valuation remains above the 10-year average, with which we remain positive about Indian equities.
Regarding the debt market, HSBC Fund House says that the 2 to 4 year corporate bond segment is offering attractive opportunities. At the same time, uncertainty regarding the outlook for inflation and growth can become the basis for a 25 basis point rate cut in December.
Regarding equity, the report says that the growth cycle is going downwards and may reach a lower level. Interest rates, liquidity cycle, decline in crude oil prices and normal monsoon support upside growth.
Additionally, amid global uncertainty, GST rate cut and income cuts will boost private consumption and support private capex.
Medium-term investment momentum may continue due to government investment, boost in manufacturing and real estate recovery.
Indian benchmark indices recorded a better performance in October, with Sensex and Nifty rising over 4 per cent each on FII buying and improving domestic sentiment.
The NSE Midcap index gained 4.8 per cent and the BSE Smallcap index gained 3.2 per cent.
Sectoral performance was led by real estate. While Oil & Gas, Metal, Banks and IT performed better than Nifty. While healthcare, power, FMCG and auto performed weakly.
The central bank will keep an eye on the upcoming macro factors like CPI data for November, trade deficit, GDP and GST collection.
The report said that despite foreign-exchange intervention by the RBI, tight liquidity conditions persist. At the same time, markets are expecting liquidity infusion through open market purchases (OMO).
–IANS
SKT/
