India’s economy is expected to
rebound in 2020 as per the Confederation of Indian Industry. CII further added
that this is due to the measures taken by the Govt. of India and the RBI
coupled with easing of global trade tensions. The fiscal policy will set a
Central Govt. target for the deficit in the range of around 0.5 to .75%.
There are nascent sign of Indian
Economy( on account of improved PMIs of manufacturing and services, jump in
passenger air traffic, sharp moderation in decline of sale of passenger cars,
e.t.c.) on better footage than what it was in the year gone by. With the
proactive measures taken by Govt. in tandem with RBI will overcome the slowdown
and a gradual recovery will be in place.
Though worse is yet not behind
us, we may see some sharp decline in valuations at stock market within the last
two months of this financial year.
Going forward:
Equity Market: While macroeconomic concerns weighed on equities for
most part of the year, corporate tax reduction in September has helped equity
funds give moderate returns in 2019. We may see some good revival of Portfolios
with booking of profit in one segment and making cautious participation in
other where huge value opportunities exist. The equity market is expected to
adjust within next six months with a possibility of corrections to the tune of
5 to 6% in Feb-March 2020. Systematic approach of investment in either of the
Equities segment will certainly bear fruits in time to come.
Debt Market: Investor anguish over multiple credit events is
justified, RBI inventions and giving much desired stimulus to markets by
reducing Repo rate by 135 basis points is commendable. Gilt funds were mostly
benefitted out of this act at longer ends. The year 2020 can be safely defined
as year of consolidation and those who have seen some drop of returns in their
portfolio will see it iron out by years end.
The mantra for 2020 is stay
invested and do participate as per your risk appetite, be equity be debt.
Happy New Year
