Get Instant Loan up to ₹10 Lakh!
Sonam Udasi, Senior Fund Manager at Tata Mutual Fund expects the Budget 2024 to continue on its stated path of fiscal deficit targets. Moreover, Udasi does not expect a populist budget ahead of the General Elections 2024. In an interview with Mint, Udasi shared his views on markets and the rise of retail investors. Edited excerpts:
We expect the Budget 2024 to continue on its stated guide path of fiscal deficit targets. Focus on infrastructure development and measures to enhance Indian manufacturing competitiveness should continue unrelentingly in our view.
This government has continually shunned short-term populism and focused on long-term productivity benefits. We think the same would continue.
Nifty 50 has underperformed the S&P 500 in 2023. What is your outlook for the domestic market in 2024?
Nifty 50 has done well over the last one year and is at a decent premium to global markets. So in the short term, it may continue to lag behind its global peers.
That being said, medium-term trends may look fine for Indian equities considering the continued broad basing of the Indian economy towards manufacturing prowess.
India is at the start of a major transition to deepen manufacturing strengths across sectors like electronics, defence, railways, renewables, energy storage and auto components to name a few.
The manufacturing shift is both government-led (via PLI), as well as due to changes in global trade equations.
As these strengths come to the fore, the Indian economy is likely to become more broad-based and thus earnings are likely to reflect the same.
This I believe will continue to be the key driver for the Indian economy and consequently, for Indian equities.
Past trends suggest that Election periods are generally volatile due to the expectation of uncertain outcomes.
Owing to the recent state election outcomes, investor expectations on the risk of shock outcomes have come off.
While this period may bring volatility, the long-term growth potential of India will ultimately trump everything.
Recent US Fed guidance on easing interest rates in 2024 bode well for risk asset classes.
While the US is likely to get into slow gear, equity markets are likely to discount this and look past this.
Indian investors in our view, should focus more on asset allocation strategies for their long-term goals.
This is a very interesting and thought-provoking question. For us as a mutual fund industry, the deepening of the investor base is very heartening and indicates the growing sophistication of Indian retail investors.
As India and Indians grow richer, we believe retail participation will become more sticky and the financialisation of savings trend will get more legs as years go by. This will translate hopefully, to more depth in the Indian equities market.
Read all market-related news here
Disclaimer: The views and recommendations above are those of the expert, not of Mint. We advise investors to check with certified experts before making any investment decisions.
Catch all the Budget News , Business News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.