Quantum Mutual Fund expresses optimism about Indian equities beyond the banking and IT sectors. The mutual fund highlights three key factors—foreign investment inflows, a resurgence in private capital expenditure, and a rebound in mass market segments—as pivotal drivers that will shape the trajectory of the Indian market throughout 2024.
Banks and information technology (IT) sectors, despite showing restrained returns in 2023, are poised to become key drivers in 2024, according to analysts at Quantum Mutual Fund. Despite a potential upswing in earnings, these sectors are expected to catch up and take the lead in the market due to various positive triggers. Quantum MF anticipates a favorable credit cycle and a resurgence in corporate credit uptake to boost earnings for banks. Simultaneously, a potential soft landing in the US could expedite the conversion of deal wins into earnings for the IT sector. While the report doesn’t provide specific earnings or growth projections, it emphasizes the significant role these sectors could play in driving market momentum.
Moreover, the analysts anticipate that banks and IT will benefit substantially from the return of Foreign Institutional Investor (FII) flows, adding another layer of optimism to their outlook. Although the report doesn’t offer specific market gain forecasts or target levels, it highlights the potential synergy between positive factors, such as a favorable credit environment and a global economic soft landing, contributing to the resurgence of these sectors. As 2024 unfolds, the stage seems set for banks and IT to emerge as major contributors to market dynamics, aligning their performance with robust earnings expectations and positive market triggers.