Cautious optimism

Global headwinds may add to volatility in stocks

Investors have reason to be satisfied with stock-market returns at the half-year mark of 2023-24. They also have reason to be cautious, heading into the second half of FY24. The major market indices are up 12-13 per cent since April. But the pace of earnings growth slowed in the first quarter. Global growth is muted and this has meant reduced exports and a lower increase in revenue for IT services. Another pressure-point is high energy prices. The combination of lower exports and higher energy costs has led to wider external deficits.

The US Federal Reserve (Fed) maintains a hawkish stance and