Indian equities have performed well in the first half of 2023, reaching all-time highs, and money managers are optimistic about the market s prospects for the rest of the year. According to a survey, 86% of brokerages expect the benchmark Nifty 50 to be above 19,000 by December, and 79% believe the Sensex will surpass 65,000. Foreign and domestic fund flows are also expected to sustain, driven by strong corporate earnings and attractive growth potential. However, volatility may persist due to global interest rate hikes and geopolitical risks. The automobile, FMCG, and realty sectors are expected to continue gaining momentum in the second half of the year, while banking stocks are expected to rebound. Midcap and smallcap stocks are also expected to perform well, outperforming benchmark indices.
In the last five years, the Sensex has given positive returns to investors in the second half of the calendar year with double-digit returns in the last three years, making it an attractive investment destination. Additionally, all sectoral indices have given positive returns in the second half in the past three years, with 10 of the 15 sectoral indices on BSE giving double-digit returns in H2 of 2022, including the banking, commodities, and financial services sectors. On the macroeconomic front, foreign inflows are expected to continue despite risks from a weak monsoon and global risks impacting FII flows.
Going forward, inflation will continue to be a key driver for global banks in shaping their policy and this will continue to play on equity market participants’ outlook.
As per RBI s data, the average daily absorption under the LAF moderated to ₹1.4 lakh crore during February-March from an average of ₹1.6 lakh crore in December-January. During 2022-23, money supply expanded by 9% and non-food bank credit rose by 15.4%.
Gold prices typically rise when the US dollar and bond yields fall. This year, the US dollar has dropped by 0.60 percent and corrected almost 10.0 percent from last year s peak of 114.78