Average development, affordable returns
Mookim cautioned traders to mood expectations, highlighting that nominal GDP development has slowed from over 20% in FY23 to round 8% presently, with solely a gradual pickup anticipated over the subsequent few years. “If I make 9% in equities in an index ETF, I must be proud of it. It’s a good return,” he stated, noting that top double-digit compounding returns will not be practical over the subsequent three years.
For brief-term traders, he added, returns will rely much less on development and extra on earnings surprises, which stay troublesome to foresee given the present financial backdrop.
Sector preferences: Financials, consumption, actual property, energy, defence
On sector allocation, Mookim expressed confidence in financials and client discretionary, citing enticing valuations in comparison with world friends. He additionally highlighted alternatives in actual property, energy, and defence shares, describing them as idiosyncratic performs with long-term development potential.
“Financials and client names take advantage of sense as core holdings. Past that, actual property and energy stay promising areas,” he stated.
IPOs absorbing liquidity, secondary market nonetheless related
Addressing issues that IPOs and block offers had been absorbing market liquidity, Mookim argued that this was a part of the fairness market’s pure operate. “The operate of the fairness market is to take financial savings and supply it to corporates who will use these financial savings to develop property. So long as there’s provide of cash, there might be demand,” he stated.He additionally dismissed the thought of focusing an excessive amount of on FII circulate knowledge. “Each day, web flows are zero. Markets transfer primarily based on the impulse of the customer or vendor. We can’t make investments on anticipation of flows however should concentrate on fundamentals,” he added.
Broader protection, deeper market participation
Mookim emphasised how India’s fairness market has structurally deepened lately. Buying and selling volumes have expanded from $3 billion a day in 2019 to $12 billion right now, with greater than 200 shares within the F&O section. JPMorgan itself has expanded protection from 130 shares to almost 190, reflecting rising investor demand.
“India will at all times be a inventory picker’s market. Liquidity and curiosity are much more sturdy now in comparison with 5 years in the past,” he stated.
Nifty goal and outlook
JPMorgan has set its Nifty goal at 26,500 for the subsequent 6-12 months, reflecting optimism regardless of short-term volatility. “Logically, markets ought to go up yearly,” Mookim stated, including that near-term catalysts such because the India-US commerce discussions may present extra triggers.
Whereas he acknowledged volatility and world uncertainties, Mookim reiterated that India’s relative valuations and structural development drivers make it one of many few massive economies with seen long-term development.
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