Equity Market Outlook
Long-term outlook remains intact:
- Over the short-term, quarterly earnings, monsoons and global interest rates are key monitorables.
- The budget has outlined steps that should boost consumption demand, particularly in rural areas, which can drive the rural theme. On the same lines, sustained capex and infrastructure expansion plans in the budget is a positive for these sectors.
- Banking and the financial sector would be expected to perform a critical role, which puts the spotlight on BFSI.
- Market valuations continue to hover at higher levels, making it important for investors to maintain a longer investment horizon. At these valuations, large caps and flexicaps are preferable vis-à-vis small and mid caps, given the risk and valuation divide between the fund categories*.
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.