Market Overview & Investment Picks – 2020



Markets have been more volatile over the years and 2019 was no different, with many markets posting steady rises. The global economy, there is the hope of a flattish global growth as trade tensions have lessened and continuity of accommodative monetary policies across the globe is expected to pay-off dividend in 2020

Global trade rift, liquidity worries, slower economic growth, corporate tax cut, and series of rate cuts by the Reserve Bank of India are among the few that guided the Indian markets through the year 2019. Indications from the government sources suggest that the forthcoming budget would provide further measures to support growth including a reduction in the personal income tax rate. We feel that in the current phase government should focus primarily on growth-inducing measures even if the same results in a temporary jump in deficit. In this context, the rollback of long-term capital gain and ‘super-rich’ tax would be significant confidence-boosting measures without large fiscal implications. There is an expectation that policy measures announced so far and other measures which are expected to announce in the upcoming budget may reverse consumption and economic slowdown.

Governments focus on disinvestment is expected to continue to bridge the gap of widening fiscal deficit, non-banking PSU stocks may continue to do well in the coming year as well.

With growth acceleration and improvements in investor risk appetite, we also expect the breadth of the Indian equity market to expand. Consequently, unlike in the last two years, mid and small-cap stocks are likely to outperform large-cap bellwether’s

NOTE: Time Horizon – 12 Months

Author: Mr.Siddharth Sedani, Vice President – Equity Advisory, (Investment Services), 1st Jan 2020


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