Edited excerpts:
What are your key expectations from the Union Budget 2024? Do you expect growth-oriented measures or populist ones?
As we approach Budget 2024, we anticipate a continued focus on advancing India’s digital public infrastructure, which is essential for achieving the $5 trillion economy dream.
Enhanced government initiatives for financial inclusion, smart cities, AI centres of excellence and public-private partnerships in tech adoption are crucial.
The fintech industry will continue to innovate with robust government support.
After the Interim Budget, the outlook has been positive with initiatives like Startup India, a ₹1 lakh crore corpus, and 50-year interest-free loans for research and innovation. This support will boost the tech sector and startup community.
Reducing the fiscal deficit to 5.1 per cent of GDP by 2025-26 and investing in deep tech for defence, infrastructure, and air connectivity to tier 2 and 3 cities showcased a holistic and forward-looking approach.
I look forward to more initiatives supporting developed India and Viksit Bharat, fostering entrepreneurship, employment, and technological prowess.
What is your assessment of India’s economic growth for the current financial year?
India’s FY 2024-25 economic growth looks promising, with forecasts hovering around 7.2 per cent.
This optimism stems from a rebound in consumer spending, rising investments, and a strong Q3 performance.
A normal monsoon and improving rural demand are expected to support growth further and stabilise inflation.
The final outcome hinges on the government’s ability to navigate these challenges.
Sustaining positive domestic factors like rural demand and investments will be crucial.
While the current outlook is positive, staying informed about yearly developments is essential, as the economic landscape can be dynamic.
What is your medium-term outlook for the Indian stock market?
The Indian stock market looks positive in the medium term, with some volatility.
However, as a thumb rule, detailed company-level research, realistic earning goals, and investor prudence are advised as prerequisites.
Large and mid-caps stocks seem less volatile from a medium-term outlook.
Given the interest rate decreases, small and micro-cap stocks can also have a positive outlook.
As inflation has eased a bit, interest rate cuts can be expected in the near term.
Inflationary pressures have eased a bit, which may call for rate cuts in the foreseeable future.
Such an action will see a spurt in demand and supply, so mid-cap and micro-cap stocks can perform well in such a scenario.
If the tax rates are reduced, it can boost consumer spending and lead to business growth.
Automobile and auto ancillary, defence, infrastructure, energy, capital goods, cement, railways, FMCG, and the banking and financial sectors are some of the sectors that showcase potential in the medium term.
However, thorough research and detailed analysis are necessary before investing in the stock market.
The market seems to have discounted most triggers. What are some key factors that will influence the market from here on?
As the elections are over now, the next big thing for the market can be the Union Budget, which is expected to come in July.
A favourable budget can further boost the market, which has already touched new highs since the election results were out.
Investors are also looking forward to rate cuts by the central bank.
As RBI started raising the interest rate following Fed rate hikes in 2022, a cut in the Fed rate can also boost the domestic market in two ways.
One, foreign investors will turn towards the equity market, and India, one of the brightest spots now, will attract them further.
Secondly, with rate cuts, both demand and supply can surge, boosting the business environment and the economy.
Finally, the weather conditions have always played an intricate role in the Indian stock market.
With favourable monsoon predictions this year, food inflation can be checked, which can be positive for the market.
When can the US Fed and RBI start cutting rates? What could be the magnitude of rate reduction?
Inflation has been easing over time; thus, RBI and Fed have held the rates for some time now.
However, until inflation is within the determined range of the central government in both India and the US, rate cuts seem tough.
If inflation continues to come down, then by the end of FY25, we can expect a cut in the interest rates, but it may not be of huge magnitude.
Maybe a 25 to 50 bps cut will take the 6.50 per cent repo rate down to 6.25 per cent or 6 per cent by the end of FY25.
The number of retail investors in the Indian market has sharply risen. What are the reasons behind this surge, especially in tier-2 and tier-3 regions?
The Indian stock market is experiencing a surge in retail investor participation, particularly in tier-2 and tier-3 cities, driven by several factors.
Increased awareness and financial literacy, propelled by the digital revolution, have made investment information and platforms more accessible through smartphones and the Internet.
This accessibility, coupled with a shift in mindset away from traditional investments like gold and real estate, has fostered interest in stock market opportunities.
Technological advancements such as fintech platforms offering user-friendly apps and fractional shares and the dematerialisation of shares have simplified the investment process.
Economic factors also play a role, with low interest rates on traditional savings options making the stock market more attractive for higher returns and a bullish sentiment surrounding the Indian economy bolstering investor confidence.
Sociological factors, including the fear of missing out (FOMO) driven by social media and aspirations for a better lifestyle among the growing middle class, further encourage participation.
While this rise in retail investors is positive, it necessitates a focus on investor education and responsible investment practices to ensure that new investors understand risks and conduct thorough research before investing.
How is Shoonya emerging as one of the fastest-growing brokerage platforms?
Shoonya is rapidly becoming one of India’s fastest-growing brokerage platforms by leveraging several key factors.
In the month of May, we were 27th on the list of top brokers in India. Our true zero-commission trading model eliminates all trading fees and commissions, making it a cost-effective option, especially for new investors and those with smaller portfolios.
It also reduces the learning cost, giving new investors an edge and helping them kick-start their financial wellness journey.
Our focus on technology, featuring user-friendly mobile apps and online platforms, caters to India’s growing tech-savvy population, particularly in tier-2 and tier-3 cities.
Additionally, we have partnered with I Know First – a data-powered, signal-based analysis feature that provides valuable guidance to investors.
Shoonya’s unique selling proposition is leveraging AI to democratise trading and assist investors in making informed and strategic decisions.
We offer access to data-driven signal analysis for 1,500 Indian scripts, including large, mid, and small-cap stocks, along with predictions for key Indian indices from NSE and BSE.
Our deep learning algorithms generate colour-coded signals, making market interpretation straightforward. Each prediction includes a confidence indicator, clarifying the reliability of stock forecasts.
The platform also generates instant heatmaps for stock market forecasts across various time ranges and enables portfolio monitoring, allowing investors to optimise their portfolios with daily AI predictions.
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Disclaimer: The views and recommendations above are those of the expert, not Mint. We advise investors to consult certified experts before making any investment decisions.
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Published: 25 Jun 2024, 12:26 PM IST