In December 2023, the Nifty surged by 8%, with similar gains in Mid-cap and Small-cap Indices. Sectoral indices, especially power, PSU, and Oil & Gas, showed significant increases. Indian markets outperformed globally, leading ahead of Australia, Mexico, and Singapore, while Russia and Shanghai declined. The Indian Rupee appreciated slightly, reaching approximately 83.12/USD.
The monetary policy meets expectations, projecting a 4.6% inflation rate for April-December FY25 and hinting at RBI's potential shift to a Neutral stance due to a 200 basis point real rate. Growth projections at 6.5% allow the MPC to keep its current stance until the anticipated Fed pivot in Q1CY2024. With the interest rate hiking cycle seemingly over, investors are advised to consider extending their portfolio duration.
The 2024 annual outlook emphasizes the global economy's resilience amid geopolitical challenges, with a focus on the balance between growth and inflation. It highlights India's rising economic significance, driven by infrastructure growth and capital availability, and underscores investment potential in capex cycles, real estate, and financial services. This outlook predicts a positive trajectory for India's economy in 2024.
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