Tightening of liquidity conditions may trigger volatility in Indian equity markets: Nomura

Nomura has listed growth outlook beyond Covid-19 pandemic and tightening of liquidity conditions as two key macroeconomic factors that will lead to volatility in Indian equity markets in the year ahead. As per the agency, despite a strong recovery from the early impact of Covid-19, many economic indicators are still trending below the pre-pandemic growth path. Weak consumer sentiment and continued disruptions from the pandemic have adversely impacted the country’s growth rate. In its growth outlook report, Nomura further noted that the pandemic has accelerated the earnings recovery process due to market share gains by large players, lower operating costs and higher commodity prices. Over the next 12 months, it expects the market to focus on earnings growth beyond 2023-24. With an improvement in profitability playing out, growth beyond 2023-24 will depend increasingly on the broader economic growth.

References
1. https://economictimes.indiatimes.com/news/economy/indicators/markets-sensitivity-to-change-in-eco-growth-outlook-remains-high-nomura/articleshow/88845981.cms