HSBC picks banking, consumption, IT as top investment themes for 2024

India is undergoing an industrial renaissance and the country is the most promising structural growth story in Asia over the next decade, an HSBC Global Private Banking release said on Wednesday, quoting HSBC’s Chief Investment Officer (CIO) James Cheo. Cheo has picked Indian banks, consumer discretionary and IT companies as his top bets in the domestic equity markets.

Cheo maintained that the above sectors will benefit from the booming digital economy, consumer spending and service exports. In his view, the rise in India’s new economy sectors viz. high-tech services, digital start-up ecosystem and services exports could raise its potential growth to 6.5% in 10 years, up from an average 6% growth before the pandemic.

Cheo is CIO for South East Asia and India, Global Private Banking and Wealth.

HSBC Global Private Banking is a wealth management service, which offers tailored solutions to its clients across the world through a network of experts.

“India’s strong government spending and private investment growth, robust FDI inflows and booming services exports will continue to power employment, private consumption, and productivity gains,” said Cheo, adding that India’s 6% GDP growth this year will support robust 18% EPS growth in 2024.

The premium valuation of Indian equities at 20X forward earnings is well supported by its high RoE of 16% — well above the 10.7% Asian regional average ROE — the release said quoting the CIO.

India has consistently delivered stronger-than-expected growth in manufacturing and service activities throughout 2023, with strong FDI inflows and booming services exports powering employment, private consumption, and productivity gains, Cheo said.Headline index Nifty delivered 20% returns in 2023. Into the second week, Nifty has managed to remain flat witnessing a two-way trade. On Wednesday, the benchmark indices picked up momentum in the last hour of trade amid buying action in heavyweights Reliance Industries and ICICI Bank to close in the green for the second session in a row.

While the S&P BSE Sensex settled at 71,657.71, up by 272 points or 0.38, the broader Nifty at 21,618.70, higher by 74 points or 0.34%.

(Subscribe to ETMarkets WhatsApp channel)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)