17 Jan What Factors Could Trigger a 20% Fall in the Indian Market? Amit Goel Shares Insights

Are There Warning Signs for Investors?
Why Does Amit Goel Anticipate $30-40 Billion FPI Outflows in the Second Half of 2024

Highlights:
 

• Amit Goel projects robust domestic inflows in the first half of 2024.

 

• Forecasts suggest marginal FII inflows, maintaining a neutral outlook during this period.

 

• Anticipates a shift in the second half, expecting substantial FII outflows.

 

• Goel estimates potential FII outflows ranging from $30-40 billion in the latter part of 2024.

Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, predicts a substantial decline of around 20% in Nifty and Sensex in 2024 compared to their 2023 levels. He asserts that the current market valuation is excessively high, indicating an imminent downturn.

In 2023, NSE Nifty saw a rise of 20.03%, and BSE Sensex increased by 18.74%.

However, Amit Goel emphasizes that despite these positive numbers, the Indian markets face a considerable risk of correction.

Also Read:PSU Stocks Rally: What’s Fueling the Surge?

Factors Influencing the Downturn

Amit Goel identifies three main factors contributing to the anticipated market decline:

Earnings Expectations: Goel points out that optimistic earnings projections for Indian companies pose a significant risk. If these projections fall short, it could trigger substantial sell-offs in the stock market.

Global Recession: He anticipates a global recession in the second half of 2024, impacting the corporate sector’s performance and valuations.

High Valuations: The price-earnings ratios of Indian stocks are currently at historic highs, leaving little room for upside. Foreign Institutional Investors (FIIs) might turn sellers, leading to decreased stock prices and valuations.

Also Read: Why EV Battery Makers Promise Growth in 2024”
 
Outlook on Mid and Small-Cap Stocks

Amit Goel suggests that the outperformance of mid and small-cap stocks observed in 2023 may not sustain in 2024. Rich valuations in this segment could lead to a shift of investor focus towards large-cap stocks, resulting in a potential 30% cut from the 2023 closing levels.

Top 3 Nifty Stocks for 2024

Goel recommends BPCL, SBI, and Dr. Reddy as potential outperformers due to their reasonable valuations and quality earnings. However, he expects only about a 10% appreciation in these stocks given the overall market’s downward trajectory.

Interim Budget and Market Expectations

Regarding the interim budget in 2024, Goel downplays its significance, attributing reduced importance to budgets post-GST implementation. He anticipates measures to bolster electoral prospects, such as increased subsidies and announcements of significant infrastructure projects.

Three Biggest Risks for the Market in 2024

Global Recession: A probable global economic slowdown stands as a substantial risk.

FIIs Turning Sellers: The potential for significant selling by Foreign Institutional Investors.

Earnings Disappointment: Overly optimistic earnings expectations for Indian companies could lead to underperformance.

Also Read:Polycab Saga: All You need to Know?
 

Undervalued Sector with Growth Potential in 2024

Amit Goel expresses bullish sentiments towards oil marketing companies, citing inexpensive valuations, potential deregulation, and a shift in investment preferences. He expects around a 10% increase in their prices in 2024.

Equity Investment Strategy for Investors in their 20s and 30s

For investors in the 20-30 age bracket with a moderate risk appetite, Goel suggests a 100% investment in large-cap stocks. He advises avoiding small and mid-caps due to the current market overvaluation. The focus should be on safer stocks with low price-earnings ratios, high dividend yields, and good earning visibility.

In summary, Amit Goel’s outlook for 2024 emphasizes caution, anticipating challenges in the global and domestic markets and recommending strategic shifts in investment preferences.

Please note that we are not SEBI-registered advisors or analysts. All the views shared in this article and all the content shared on aceink.com are only for learning and educational purposes. Any part of the article or any information on Aceink.com should not be interpreted or considered as investment advice. None of the opinions, views, or content posted on Aceink.com constitutes investment advice, as we are not SEBI-registered advisors or analysts.

DISCLAIMER:

We are not SEBI-registered advisors or analysts. All the views shared in this article and all the content shared on aceink.com are only for learning and educational purposes. Any part of the article or any information on Aceink.com should not be interpreted or considered as investment advice. None of the opinions, views, or content posted on Aceink.com constitutes investment advice, as we are not SEBI-registered advisors or analysts.

Aceink.com or any person associated with this website accepts no liability or responsibility for any direct, indirect, implied, or any other consequential damages arising directly or indirectly due to any action taken based on the information provided on this website. Please conduct your own research, and we suggest seeking investment advice only from a SEBI-registered investment advisor.

The views expressed by investment experts, broking houses, news and media houses, rating agencies, etc., are their own and not those of Aceink.com or its management. Aceink.com advises users to consult a SEBI-registered investment advisor before making any decisions.