In a recent interview with Moneycontrol, Shradha Sheth, the Head of Equities at Neo Wealth and Asset Management, expressed her outlook on interest rates, market sentiment, and sectoral growth for the fiscal year 2024. Sheth expects interest rates to remain steady throughout FY24, with the possibility of initiating a gradual reduction cycle starting in June 2024.
“We expect market sentiment to continue strengthening,” Sheth stated, highlighting her positive outlook on the market. She anticipates that the BSE Sensex may soon surpass the psychological threshold of 70,000. Further gains, potentially reaching 75,000, are expected to be driven by robust demand, earnings growth, and macroeconomic factors. Sheth also emphasized the impact of the upcoming Lok Sabha elections and the current government’s victory on market dynamics.
Providing insights into sectors poised for growth in 2024, Sheth drew on her 15 years of experience in Indian equity markets. She identified financials, automotive, capital goods/industrials, utilities, cement, healthcare, pharmaceuticals, and consumer discretionary as sectors expected to benefit from economic strength.
Examining the Nifty’s current valuation, which stands at 19.3x FY25 EPS, slightly below its long-term average of 20x, Sheth highlighted the recent electoral win by the BJP in major state elections. This victory, along with growing expectations of an impending rate-cut cycle in the US, is seen as contributing to the sustained favourable valuations in the Indian market.
Sheth’s optimism is grounded in historical trends, pointing out that the six months following general election results (November to May) in previous instances (1999 to 2019) have yielded positive returns for the Nifty, ranging from 9 per cent to 36 per cent. As the market braces for potential positive outcomes, Shradha Sheth remains optimistic about the continued strengthening of market sentiment.
