Sensex at euphoric highs in 2024: Case for cautious optimism

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₹16,500 crore in October. The asset management reality is that FIIs have to park their and their clients’ monies somewhere amidst the prolonged global economic slowdown. The Indian economy and its future potential is being bet on.

But then, let us not take it for granted. FIIs and other global investors are unforgiving and move their monies far quicker than you can say ‘hi’ if they see better alternatives. It's crucial to acknowledge that India's equity market is intricately linked to global economic conditions.

Decisions and policies of global economic giants such as the US Federal Reserve wield significant influence over the trajectory of Indian equities. Additionally, international trade dynamics and geopolitical events can inject unforeseen volatility into the equation. With Parliamentary Election in India due by April-May 2024, many experts predict a pre-election rally in India's equity markets.

Some Indian analysts have estimated that stock markets could fall by 25% if the current ruling party does not return to power. But from historic experience, in the months leading up to such elections the money market tends to experience a cautious atmosphere. Companies and investors exercise prudence while awaiting election outcomes and potential policy changes.

Political euphemisms often come into play when describing stock market euphoria, particularly when governments seek to align positive economic sentiment with their policies. Leaders may use terms such as "economic boom" or "market resilience" to convey a sense of financial prosperity and stability under their governance. This linguistic strategy aims to present a favourable image to the public, even during periods of heightened market enthusiasm that may be subject