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Indian stocks set for a bumpy ride in 2024, boosted by notable tailwinds and impressive investor returns from the previous year. It seems that preparations are in place to welcome 2024, which will be filled with excitement. The path forward is set against a backdrop of diverse cues, from local factors such as interest rates and parliamentary opinion polls to global events such as geopolitical shifts.
Analysts expect the bull run in domestic stocks to continue, predicting that benchmark indices such as Sensex and Nifty could rise as much as 7% in the next three to six months. Strong growth in 2023, with BSE Sensex up 18.73% and NSE Nifty up 20%, bodes well for the year ahead.
Experts say key factors determining the trajectory of the stock market include the Lok Sabha elections, US presidential polls, interest rate trends in the US and India, inflation trends and geopolitical developments. .
The return of the Bharatiya Janata Party government with a majority in the 2024 general elections will carry significant weight in market expectations for the new year. According to expert insights, influential political stability shaping market dynamics is expected to foster an environment conducive to sustained economic growth and prosperity in 2024.
Motilal Oswal Broking and Distribution highlighted the pivotal role of Lok Sabha elections and the first post-election budget on the domestic front. Their note suggests strengthening market sentiment, with the ongoing pre-election bull market likely to continue and likely to be further accelerated by the possibility of a rate cut.
Dalal Street investors look forward to multiple positives in 2023, including solid domestic macroeconomic fundamentals, political stability with recent Bharatiya Janata Party victory, optimistic corporate earnings outlook, and signals from the US Federal Reserve. The company witnessed a staggering increase in assets of Rs 81.9 billion, driven by factors such as It signaled the possibility of three interest rate cuts in the next year, and increased participation from retail investors.
global scenario
The S&P 500 ended 2023 up more than 24%, and the Dow closed near its all-time high. Easing inflation, economic resilience and the prospect of lower interest rates, especially in the last two months of the year, helped lift sentiment.
Investors are hoping the Federal Reserve will engineer a “soft landing” for the economy, slowing down to contain high inflation without going into recession. As a result, market expectations suggest that the Fed will begin cutting interest rates as early as March, cutting the current benchmark interest rate by three quarter points next year from the 20-year high of between 5.25% and 5.50%. There is.
Among other major global indexes, Japan’s Nikkei Stock Average rose more than 28% in 2023, marking its best performance in a decade. Frankfurt and Paris posted recent highs with increases of 20.3% and 16.5% respectively. However, in London, the rate of increase in 2023 was kept at less than 4% due to concerns that high interest rates would persist for a long time amid concerns about inflation.
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