2024 Outlook - Softish Landing; Smooth Pivot; Swift Recovery: Nirmal Bang

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Nirmal Bang Report.A 2023 recession has thankfully been averted, but some slowdown is inevitable. Our base case in 2024 would be something between a ‘soft’ landing and a ‘shallow recession’ in the U.S. Even in a worst-case scenario, Fed-induced recessions are usually shallow (less than 1% decline) and short-lived (two-three quarters).We see greater probability of the Euro-area going into a sharp slowdown/recession, which along with moderating inflation may be sufficient to trigger a ‘pivot’ by the Fed. India will not be immune to a global slowdown and consequently we are factoring in marginal moderation in gross domestic product growth to 6.2% in FY25 from an estimated 6.5% in FY24.Moderating global growth implies benign commodity prices and consequently a ‘goldilocks’ scenario for India with the current account deficit estimated at 1.5% of GDP in FY25; wholesale price index inflation at 2.5% and consumer price index at 4.8%.We anticipate a shallow rate cut cycle from the Reserve Bank of India in FY25 (50 basis points beginning in June 2023). We are pencilling in some fiscal slippage in FY24 (6.1%of GDP) as we see the need for higher spending on rural schemes and expect some fiscal consolidation in FY25 (5.5% of GDP) on slower growth in government capex.We expect the 10-year yield to moderate to ~7% levels on average in FY25, supported by rate cuts, moderating global yields and JP Morgan bond-index inclusion. We expect the Indian rupee to remain range-bound (with a depreciation bias) although a global slowdown could lead to volatility.A turn in the rate cycle is favorable for equities and yet the risk-reward is more favorable for large caps. A sharp slowdown/shallow recession could lead to a market correction, but we anticipate a swift recovery. The recovery will depend on the extent of easing..Click on the attachment to read the full report:.Liquid Funds Drive Rs 40,685-Crore Outflow From Mutual Funds.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

2024 Outlook - Softish Landing; Smooth Pivot; Swift Recovery: Nirmal Bang

A turn in the rate cycle is favorable for equities and yet the risk-reward is more favorable for large caps.

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