HSBC says Indian markets are on track to continue outperforming in 2024


According to HSBC Global Research, positive foreign institutional investor inflows and strong domestic inflows in November are factors that could extend the bull market to the first half of 2024.

Stable rupee, low US bond yields, falling crude oil prices, solid earnings, decline in inflation are some of the positives that will give the market a strong start to 2024. With general elections due in the first few months of next year, the policy brokerage said continuity would “boost the upside in the first three to four months of the year”.

HSBC said, “We believe that all these reforms put India firmly on the path to continued outperformance in 2024.”


The brokerage expects FII outflows to reverse as we enter 2024 due to falling US bond yields and peak valuations. However, one of the risks impacting FII inflows is the rebound of China’s economy, as this could lead to disinvestment, it said. But the brokerage sees enough room to gain stock inflows in both the markets.

With the election year approaching, there may be volatility in the market as the possibility of a decisive victory of the incumbent government may give rise to the market. However, a fragmented mandate “could trigger a sharp reform”.

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“Nonetheless, the economy is in strong shape, and even with such an outcome the market is likely to improve on a full-year basis.”

While mid-cap valuations have peaked in 2023, it is “time to look at large-cap names, where gains in 2023 have been moderate and offer favorable risk reward”.

HSBC sees banks, healthcare, energy, realty, auto, retailers, real estate and telecom as favorable sectors. While fast moving consumer goods, utilities and chemicals are least preferred.

In the banking sector, brokerages are inclined towards HDFC Bank Ltd and ICICI Bank Ltd as they are likely to benefit from the reversal in FII outflows.

DMart of Avenue Supermarts Ltd and Nykaa operated by FSN E-Commerce Ventures Ltd are the preferred choices in the consumer retail sector as they look to transform their operations.

Others There are companies.


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