Moneycontrol Pro Panorama | Time to be cautiously contrarian?

Dear Reader,

The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.  The odds are rising against equity market optimism. From geopolitical tensions, interest rates concerns and the recent human metapneumovirus (HMPV) scares at a global level to local ones such as growth pangs, widening consumption slowdown and corporate earnings moderation, the uncertainties are painting a gloomy picture of what lies ahead.

Indeed, most of these variables are known to investors. That is why India’s benchmark equity index Nifty 50 is down about 10 percent from the peak it scaled in end-September. Even the Nifty mid-cap and small-cap indices have shed some gains and are down 7 percent and 5 percent, respectively. News bytes of record selling by foreign portfolio investors (FPI) are hogging media and social media headlines, adding to the negative mood in financial markets.

However, some near-term events could give investors valuable cues on how things could unfold in 2025. Globally, President-elect Donald Trump’s assuming office soon will bring to light his stance on trade relations with various countries, tariffs, manufacturing policies in line with the MAGA (Make America Great Again) mission and on geopolitical equations and ongoing wars. While the European economy is not out of the woods, macroeconomists reckon that US consumption, while comfortable, is not enough to lift global demand and trade. On another note, China’s policies have failed to lift its economy and demand remains feeble. All of these could weigh on global economic growth and on exports from emerging markets, including India.

Cut to the domestic economy, the overarching factor that's dampening market mood is that corporate earnings growth will be subdued, albeit a mixed bag. If you missed it, read Monday’s MCPro Panorama that states why Q3 FY2025 earnings could be a roller-coaster ride.