Stock Market Live Updates: Sensex and Nifty trade flat with negative bias; Coal India gains over 2%
The Indian equities seem poised for an eventful ride in 2024, propelled by the tailwinds of a remarkable preceding year and impressive investor returns. The upcoming journey is set against a backdrop of diverse cues, spanning from local factors like interest rates and the Lok Sabha polls to global events such as geopolitical shifts.
Analysts foresee the continuation of the bull run in the domestic equity market, projecting potential climbs of up to 7 per cent for benchmark indices like the Sensex and Nifty within the next 3-6 months. The substantial growth in 2023, with the BSE Sensex rising by 18.73 per cent and the NSE Nifty climbing by 20 per cent, sets a promising tone for the year ahead.
Crucial factors dictating the stock market’s trajectory include the Lok Sabha elections, US Presidential polls, trajectory of interest rates in the US and India, inflation trends, and geopolitical developments, according to experts.
The return of the BJP government with a majority in the 2024 general elections holds significant weight in the market’s aspirations for the new year. Political stability, an influential force shaping market dynamics, is anticipated to foster an environment conducive to sustained economic growth and prosperity in 2024, as per experts’ insights.
Motilal Oswal Broking and Distribution highlighted the pivotal role of the Lok Sabha elections and the first post-election budget on the domestic front. Their note suggests a strengthening of market sentiment with the ongoing pre-election rally likely to persist, further boosted by any potential rate cuts.
In 2023, Dalal Street investors witnessed a staggering increase of Rs 81.90 lakh crore in their wealth, buoyed by multiple positive factors, including robust domestic macroeconomic fundamentals, political stability due to recent BJP victories, optimistic corporate earnings outlook, signals from the US Federal Reserve hinting at three potential rate cuts in the following year, and increased participation from retail investors.
Global Scenario
The S&P 500 concluded 2023 with a gain of over 24%, while the Dow closed near a record high. The buoyant sentiment was propelled by easing inflation, a resilient economy, and the prospect of lower interest rates, particularly in the last two months of the year.
Investors are banking on the Federal Reserve orchestrating a “soft landing” for the economy, slowing down to curb high inflation without sliding into a recession. As a result, market expectations point to the Fed commencing rate cuts as early as March, with signals for three quarter-point cuts next year from the current benchmark rate, which sits between 5.25% and 5.50%, the highest in two decades.
In other major global indices, Japan’s Nikkei surged over 28% in 2023, marking its best performance in a decade. Frankfurt and Paris registered gains of 20.3% and 16.5%, respectively, with recent record highs. However, London lagged behind with less than a 4% gain in 2023, attributed to concerns about prolonged high interest rates amidst inflation worries.
