Taimur Baig of DBS highlights three factors that will shape markets in 2024
The Managing Director and Chief Economist at DBS Group Research will watch out for any surprises from China, trajectory of US economy, and fund flows and momentum in Indian equities.
Taimur Baig, Managing Director and Chief Economist at DBS Group Research, highlighted three key factors that will capture investors' attention in the upcoming year: China's economic performance, foreign fund inflows and the momentum of Indian stocks, and the broader trajectory of the US economy.
In 2024, Baig noted, it's essential to consider assets that performed poorly in 2023 and whether they have the potential for improvement. Despite negative sentiment and capital withdrawals from China, the contrarian perspective suggests that Chinese equities might offer surprises or room for improvement in the coming year.
However, he also believes that a strong momentum in market tends to continue for a while. This mean for markets like India and US, the momentum could continue for a while even in the new year.
"We're finally seeing substantial amount of exchange traded fund (ETF) money, substantial amount of active portfolio money being allocated to India, which was quite not the case in 2022 and early 2023, when India was driven by local investors. Now we're going to see foreign participation, I expect that momentum to continue through the first two quarters of 2024, if not longer," he said.
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According to him, the US economy is set to enter the new year with a promising mix characterised by slowing inflation, the potential for interest rate cuts, and a steady real economy.
"The US economy will step into '24 with an absolute Goldilocks mix, slowing inflation, likelihood of interest rate cuts, but not much slowdown in the real economy. So, China undervaluation, momentum for Indian stocks, momentum for the US economy would be my three big themes for 2024," Baig stated.
For more details, watch the accompanying video
(Edited by : Shweta Mungre)
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