5 key macro themes that will influence the market in 2024
Nifty 50 set to clock healthy double-digit gains in 2023; what are the key challenges for the market in 2024? Major central banks of the world, including the US Fed and the RBI, are expected to trim interest rates in the coming year. However, the timing and the extent of rate cuts will be the key factors. Furthermore, how central banks evaluate inflation and growth will significantly impact market sentiment.
India will most likely see General Elections in April-May. A stable government post-election is anticipated and would be favourably received by the domestic market. While an NDA victory might not result in a substantial market upsurge, its defeat could prompt a swift, short-term reaction.
Nevertheless, the market is expected to eventually refocus on fundamental aspects and corporate earnings. "With recent big wins in MP, Chhattisgarh and Rajasthan state elections, the likelihood of NDA coming to power again in 2024 has increased substantially. We don’t think the 2024 win will trigger any sharp rally in the market, it will just be business as usual.
A loss though can cause an immediate negative reaction in the markets," said Ashutosh Tiwari, Managing Director and Head of Institutional Equities at Equirus. "Foundations laid by the current government in infrastructure, manufacturing, import substitution, etc., are going to fuel economic growth over the medium term and hence barring short-term reactions, we don’t see any risk of a steep correction in the markets," said Tiwari. (Exciting news! Mint is now on WhatsApp Channels. Subscribe today and stay updated with the latest financial insights! Click here!) The Budget in February will be a Vote on Account ahead of the Lok Sabha elections.
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