Market outlook as on Jun 17, 2022

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Mr. S. Naren, ED and CIO ICICI Prudential AMC shared his outlook on equity and Debt markets. Following are the summarized pointers:

Market Outlook

  1. 1. Central bank Bull Market has ended and now we have a central bank bear market at hand. In the central bank bull market, it pulled stocks too much above their fair value, in the central bank bear market, it will pull stocks too much below their fair value. When this bear market will come to end? The moment US FED Chair Mr. Jerome Powell will stop further rate hikes. No one exactly can predict when this will happen.
  2. Equity Markets have not reached a point of maximum pessimism yet, but the Indian debt market is closer to the same. Owing to this, debt and MFs will become an interesting asset class. 
  3. Global markets witnessed more sell-off compared to Indian markets in light of recession fears growing post the move by central banks across the globe to lower the rising inflation. US Federal reserve takes its largest rate hike since 1994.
  4. Valuations models are not indicating that equities are very attractive at the current juncture hence one needs to enter into equities in a staggered manner for at least the next 3-6 months.



Key Takeaways

  1. Invest in equity mutual funds in a staggered manner (via SIPs / STPs) to prevent sharp drawdowns in the near term.
  2. Debt Mutual Funds will become more attractive, Yield to maturity is expected to increase more after 2 more rate hikes.
  3. It's the era of having moderate return expectations from equities, so investors should lower their return expectations from equities in the short to medium term.

 

Source: ET Now

Location: Indore, Madhya Pradesh, India

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