{"id":15239,"date":"2024-04-26T10:40:00","date_gmt":"2024-04-26T05:10:00","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=15239"},"modified":"2024-04-26T12:00:17","modified_gmt":"2024-04-26T06:30:17","slug":"netra-april-2024-market-analysis-report","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/","title":{"rendered":"Netra April 2024 Market Analysis Report \u2013 3 Key Takeaways!"},"content":{"rendered":"\n<p>Welcome to the April 2024 edition of Netra, where we present data-driven market insights that can inform your investing decisions.<br><br>This month, we\u2019ll talk about the precious metals bull market that&#8217;s currently taking shape, the potentially unsustainable valuations of small- and mid-cap (SMID) companies, and the growing proportion of market capital that\u2019s entering the stock market.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#Metals-finally-show-their-mettle\" title=\"Metals finally show their mettle\">Metals finally show their mettle<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#SMID-valuations-touch-the-sky\" title=\"SMID valuations touch the sky\">SMID valuations touch the sky<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#Forward-returns-could-be-more-subdued\" title=\"Forward returns could be more subdued\">Forward returns could be more subdued<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#The-bottom-line\" title=\"The bottom line\">The bottom line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#The-bottom-line-2\" title=\"The bottom line\">The bottom line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/netra-april-2024-market-analysis-report\/#Disclaimer\" title=\"Disclaimer\">Disclaimer<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Metals-finally-show-their-mettle\"><\/span><strong>Metals finally show their mettle<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Gold prices, which have been sprinting upwards since the start of this year, finally hit new lifetime highs recently. There are several reasons for this, including central banks worldwide stocking up on the metal, ongoing geopolitical tensions, and anticipated interest rate cuts in the US.<br><br>Goldman Sachs <a href=\"https:\/\/www.cnbc.com\/2024\/04\/16\/gold-is-shining-bright-like-a-diamond-and-could-hit-3000-says-citi-.html\" rel=\"nofollow noopener\" target=\"_blank\">recently stated<\/a> that gold was in an \u201cunshakeable bull market\u201d, and set a price target of $2,700 per ounce by the end of this year. Nevertheless, March 2024 saw global gold ETF holdings <a href=\"https:\/\/www.gold.org\/goldhub\/research\/gold-etfs-holdings-and-flows\/2024\/04\" rel=\"nofollow noopener\" target=\"_blank\">fall by 14 tonnes<\/a>; a rise in global gold ETF holdings would go a long way towards supporting the thesis that gold is in a bull market.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><img loading=\"lazy\" decoding=\"async\" alt=\"Netra April 2024 3\" src=\"https:\/\/lh7-us.googleusercontent.com\/DFTvbXsNeQ7LYDqwYT5qArJAFRhS3HSi7t7qrRkbfT3eg2vqG26bCwNsiMUIDxBegR83LTlQvmZZOBjYiPupiRMsW_VlKhORli1VDhllkUtAhXArkkmVxOVgn__F2HAB5ucAjTIsuo6N_4rA6-POPGw\" width=\"624\" height=\"224\"><br><em>Source: Bloomberg, DSP; Data as of Mar 2024<\/em><\/p>\n\n\n\n<p>What about silver? Well, given that silver has now pushed through a key resistance at the $26 mark, it certainly seems like a broader precious metals bull market is coming together.<br><br>Ever since Nixon delinked the dollar from gold in 1971, gold has outperformed silver by a huge margin. However, when a precious metals bull market is in place, silver tends to have a very high relative outperformance score relative to gold. Thus, it might be a good idea to add both metals to your portfolio right now.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"SMID-valuations-touch-the-sky\"><\/span><strong>SMID valuations touch the sky<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In March 2024, the median valuation (on a trailing price-to-earnings basis) for the SMID (small- and mid-cap) universe peaked at nearly double (37x) of what it was at the 2007 bull market peak (20x).<\/p>\n\n\n\n<p class=\"has-text-align-center\"><img loading=\"lazy\" decoding=\"async\" alt=\"Netra April 2024 2\" src=\"https:\/\/lh7-us.googleusercontent.com\/iJoqtskdWFr9u18zK-xph_yYI9KcgGfy5cr5q-YSKqx0KnTbL7yt2aOICm7OnzEKOx35lVWGDBwnrlgP7pbDsf2O6PNt9717QbtHd8QzPdWc8J0WgDs-f8UXM6KCvSKYig1q3YEI3IsOoq4QI6jH0io\" width=\"624\" height=\"423\"><br><em>Source: Nuvama Research, DSP; Data as of Mar 2024<\/em><\/p>\n\n\n\n<p>How should you react to this? While SMID valuations might seem excessive right now, history indicates that such apparent excesses can continue in the same direction indefinitely. However, this doesn\u2019t mean that it pays to invest in potentially overvalued stocks, nor that you should take unnecessary risks.<br><br>Current SMID valuations offer little comfort: they are likely to be unsustainable without large liquidity injections or surprise profits. Thus, for the most part, you\u2019ll need to rely on fundamentals to find opportunities in this space.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Forward-returns-could-be-more-subdued\"><\/span><strong>Forward returns could be more subdued<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Currently, the ratio of India\u2019s equity market capitalisation to its money supply (M2) is at its highest level since the 2003-07 stock market peak. M2 is a broad measure of the money supply that includes cash, checking deposits, savings deposits, and certain types of time deposits and money market funds.<\/p>\n\n\n\n<p>As can be seen from the graph below, the market-cap-to-M2 ratio is, for the most part, negatively correlated with the forward returns from stocks. In other words, when this ratio is at a relatively high level, the forward returns from stocks are usually relatively low. Thus, it might be prudent to factor this metric into your near-term investing decisions.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><img loading=\"lazy\" decoding=\"async\" alt=\"Netra April 2024 1\" src=\"https:\/\/lh7-us.googleusercontent.com\/H_GjDSjk7RhXNOtoofSZId-ZzsQnTN4iYqOQcgkALIWCelUK6Zgc5VRGYc7Ix7kCSFNNpeL4vKkUWD2Mp8QtNVO26BbnjG6fpEYdEpULcxTXTFYub7j3W5_N6uOxF9o3HXKXPQoxxwYs0aLRaABmhzQ\" width=\"624\" height=\"403\"><br><em>Source: Bloomberg, DSP; Data as of Mar 2024<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The-bottom-line\"><\/span><strong>The bottom line<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Given the rosy prospects for gold and silver for the rest of this year, it might be worth adding them to your portfolio if you haven\u2019t already done so. In addition, the high valuations in the SMID space should be responded to with a fundamentals-first approach. Lastly, the currently high market-cap-to-M2 ratio should be looked upon as a cautionary sign.<br><br>For more actionable insights backed by data and analyses, we invite you to read the <a href=\"https:\/\/www.dspim.com\/latest-literature\/netra-april-2024.pdf\" rel=\"nofollow noopener\" target=\"_blank\">latest edition of Netra<\/a> in its entirety.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.dspim.com\/campaigns\/brand-page\/?utm_source=blog&amp;utm_medium=gart&amp;utm_campaign=dsp\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">SEEK GUIDANCE FROM AN EXPERT<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The-bottom-line-2\"><\/span><strong>The bottom line<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Despite global uncertainties such as ongoing wars, geopolitical crises, and surging oil prices, India has stood its ground. The economy is on the path to normalcy, corporates have strengthened their balance sheets, there is increased capital expenditure in infrastructure, and the banking sector is in great shape. It can be a great time for India to push its growth horizon.<\/p>\n\n\n\n<div class=\"wp-block-buttons is-content-justification-center is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.dspim.com\/media\/pages\/latest-literature\/bca9a82214-1712296885\/netra-april-2024.pdf?utm_source=blog&amp;utm_medium=gart&amp;utm_campaign=dsp\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">DOWNLOAD FULL REPORT<\/a><\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Disclaimer\"><\/span><strong>Disclaimer<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><em>In this material DSP Asset Managers Pvt. Ltd. (the AMC) has used information that is publicly available, including information developed in-house. Information gathered and used in this material is believed to be from reliable sources. The AMC however does not warrant the accuracy, reasonableness and \/ or completeness of any information. The above data\/ statistics are given only for illustration purpose. The recipient(s) before acting on any information herein should make his\/ their own investigation and seek appropriate professional advice. This is a generic update; it shall not constitute any offer to sell or solicitation of an offer to buy units of any of the Schemes of the DSP Mutual Fund. The data\/ statistics are given to explain general market trends in the securities market and should not be construed as any research report\/ recommendation. We have included statements\/ opinions\/ recommendations in this document which contain words or phrases such as \u201cwill\u201d, \u201cexpect\u201d, \u201cshould\u201d, \u201cbelieve\u201d and similar expressions or variations of such expressions that are \u201cforward looking statements\u201d. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and\/ or investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc.<\/em><\/p>\n\n\n\n<p><strong><em>Mutual Fund investments are subject to market risks, read all scheme related documents carefully.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Explore the April 2024 edition of Netra for key insights on the precious metals bull market, SMID valuations, and market capital trends.<\/p>\n","protected":false},"author":146,"featured_media":14514,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"yes","footnotes":""},"categories":[1770],"tags":[],"acf":[],"modified_by":"KraftPixel","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2023\/11\/TickerTape-Banners-Netra-1506-x-576-2.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/15239"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/146"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=15239"}],"version-history":[{"count":1,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/15239\/revisions"}],"predecessor-version":[{"id":15240,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/15239\/revisions\/15240"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/14514"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=15239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=15239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=15239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}