Investment strategist names four factors likely to move markets next fiscal year

With next month’s earnings season, OmniScience Capital CEO and Chief Investment Strategist Vikas V. I expect it to show.

In an interview with Moneycontrol, he said that many corporate managements are likely to announce large capital investment plans ranging from 50% to 100% of existing fixed assets over the next two to three years.

Regarding the stock market, the founder of Omniscience Capital, who has 20 years of experience in capital markets, said that the main factors for the next financial year (FY25) include factors like the Indian elections and the US; He said expected interest rate cuts by the Federal Reserve and central banks are among the factors. election.

What are your expectations for the upcoming quarterly and full-year earnings season and management commentary?

Full-year earnings are expected to be mixed in some sectors. However, we expect management commentary in most sectors to provide a very bullish outlook for the future. Many management teams are likely to announce large capital investment plans ranging from 50% to 100% of existing fixed assets over the next two to three years. This optimism stems from the recognition of a new economic cycle that is poised to generate a major economic boom, supported by lower interest rates.

Government policies encouraging investment, particularly from the public and private sectors, initiatives such as the PLI (Production-Linked Incentive) scheme, and efforts to diversify global supply chains away from China have led to significant foreign direct investment (FDI). It is expected that they will be invited.

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Furthermore, foreign institutional investors such as pension funds and sovereign wealth funds are showing interest in long-term infrastructure projects in India, further increasing their favorability.

Do you expect the market to correct significantly in FY25 before Nifty moves towards the 25,000 mark?

Corrections are always possible in a bull market, but their timing and magnitude are difficult to predict. Market movements are unpredictable, so waiting for a correction may not be wise. Rather than timing the market, a more reliable approach is to follow scientific investing techniques and buy when assets are below their intrinsic value so that you can capture alpha whenever it is available. It is to do.

What will drive the stock market in the coming financial year, and what are the potential risk factors that could limit the market’s upside?

Key drivers for the stock market in the coming financial year include expected interest rate cuts by the Federal Reserve and central banks, along with factors such as the Indian elections and the US elections.

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The market will also be driven by capital spending, revenue and profit growth, particularly with twin balance sheet opportunities. Risks such as an inflation surprise in the US or an election surprise in India could limit market upside, but these scenarios are currently unlikely.

What do you think about the Fed’s dovish policy announcement, suggesting it will cut interest rates three times this year without specifying when, even though inflation is above its long-term target?

The Fed’s cautious approach can be attributed to several factors, including inflation trends and global economic uncertainty. Inflation excluding housing is already below the 2% target, but the FOMC is concerned that the upward trend in small business wages could affect headline inflation.

The Fed is seeking flexibility to adjust policy based on different scenarios, even though it sees inflation as more likely to reach its 2% target by the end of 2024.

Do you expect DII flows to outstrip FII flows in the coming years? If so, what is your outlook for the wealth industry?

Both DII and FII inflows are expected to increase significantly, and FII inflows could be significant, similar to historical inflows to China. The Indian wealth industry is at a tipping point and is expected to grow significantly over the next decade, reflecting the growth and maturity of the overall wealth management sector.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not the views of the website or its management. Moneycontrol.com advises users to check with certified professionals before making any investment decisions.