Markets have discounted slower economic growth and weaker corporate earnings in the near term, which means any negative surprise on growth or earnings won't come as a shock, according to Nitin Jain of Kotak Mahindra Asset Management (Singapore).
On the flip side, any positive trigger will be lapped up by investors and could result in sharp upside moves, said Jain, chief executive officer at the asset manager. The initial months of 2025 could witness volatility induced by Trump 2.0, geopolitics or by lack of excitement on earnings, making this a good time to accumulate equities, he said.
Edited excerpts:
FII selling has resumed after a month of inflow. What do you make of the new year?
As we go into 2025, it's going to be a very exciting year to say the least, because as soon as we go into the year, we would be looking at Trump 2.0 and that brings in a lot of uncertainty for global markets. There is going to be a lot of talk about trade, tariffs, and immigration. On the positive side, (there is) talk about deregulation and the focus on cutting down wasteful spending in the US to reduce the mounting debt. So that will take center stage.
We expect slightly better earnings compared to what we saw in the September quarter. The festive season was slow to pick up, but it did pick up towards the end. The wedding season has been a good support for economic activity in the last quarter. The government spending, though, remained less than budgeted. It only picked up at the end of the quarter (October-December).
Foreign investors are already underweight India, from being a traditionally overweight market for them. So yes, there can be some probability that flows in the initial period may be volatile, but we would likely have a much better foreign investor flow through the year.
Will corporate earnings beat expectations in H2?
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Esta historia es de la edición January 06, 2025 de Mint Ahmedabad.
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