India is still a bright spot in the global macroeconomic landscape and is predicted to expand its major economy at the fastest rate this year, according to a research released on Tuesday.
With its current economy ranking fifth in the globe, the nation is expected to soon rank among the top three economic powers in the world. The International Monetary Fund (IMF) Deputy Managing Director, Dr. Gita Gopinath, said last week that the government is probably going to accomplish this by 2027.
The nation’s economic growth for FY25 is expected to increase by 7%, according to the IMF, from 6.8% in April.
India’s economy has seen impressive headline numbers overall, largely due to significant public investment, which has been a key driver of growth.
The performance of the equity market has been primarily driven by the exceptional growth in corporate profitability over the last five years, according to the most recent report from Motilal Oswal Private Wealth (MOPW).
According to the report, the PAT growth for the top 500 listed businesses (Nifty500) between FY19 and FY24 was 22%, and these companies’ total market caps increased at the same pace during this time.
It further stated, “Earnings growth is expected to moderate going forward.”
Large caps are fairly valued, while the combined cost of mid- and small-cap stocks is comparatively high.
The yield curve has begun to gradually steepen in the fixed income market due to favorable demand-supply dynamics and well-contained inflation; debt instruments with maturities of one to three years are now trading at lower yields than those with maturities of ten years and above.
According to the research, “the RBI is likely to maintain status quo on interest rates this year with an eye on the US Fed rate actions.”
Multi-asset allocation funds, which invest in debt, equity, and gold, received a boost from the budget and are a better option than typical fixed income.
