Stock Markets and Diwali 2023: What could be the top challenges before Nifty 50 in Samvat 2080? Analysts explain

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General Elections, inflation and interest rate trajectory are the key factors that will influence the market. "The Nifty 50 faces potential challenges in the next Samvat. While it currently boasts a TTM (trailing twelve months) PE (price to earnings ratio) of 22.8, contingent on Bloomberg's estimates of 18 per cent earnings growth in the calendar year 2024 (CY24) and 12 per cent in CY25, valuations remain justified.

However, a slowdown in earnings growth, for any reason, could undermine these valuations," said Anita Gandhi, Director, Arihant Capital. Politics and global economic climate will remain top factors for the market in the next Samvat. The performance of the Nifty 50 is susceptible to political stability.

"Any political turmoil or unfavourable international conditions can adversely affect valuations. As always, the market is susceptible to unforeseen events, emphasising the need for diversification and risk management. In the upcoming year, investors must vigilantly monitor earnings, sector-specific developments, political stability, global influences, and unexpected challenges to navigate successfully," said Gandhi.

The fight against inflation continues in the world and due to geopolitical tensions, there is much uncertainty about interest rate trajectory and global economic growth. As Deepak Jasani, Head of Retail Research at HDFC Securities pointed out that the central bankers, finance ministries, as well as investors, may struggle with inflation that has been sticky so far (led by supply issues in commodities) and the resultant high interest rates. If this situation is not resolved soon, a global economic slowdown cannot be averted.