Ira Singh
Khabar Khabaron Ki,24 Nov’23
As India’s economy continues its robust trajectory, analysts foresee a significant upswing in the country’s stock market, predicting a surge to new heights within the next six months. The bullish sentiment is underpinned by the sustained growth of India’s economy, hailed as the fastest-growing among major economies worldwide.Projections indicate a remarkable rise of up to 10% in the stock market by the end of 2024. Despite the current valuation being relatively high compared to other major indices, analysts remain optimistic about the potential for Indian stocks to hit record highs.
Bullish momentum
The benchmark BSE Sensex index,touched an all-time high of 67,927.23 in September, recording the longest streak of gains in 16 years.The index has since dropped around 3% but was almost still up 8% for the year, signifying a robust performance in the face of uncertainties.
While that run positions India as one of the best-performing markets-the BSE index has risen in nine of the past 10 years it also makes it expensive compared to regional peers and other major indices.The BSE’s current price-to-earnings ratio of 21.45 is second only to the U.S. S&P 500 ratio of 23.11, the impressive run-up in domestic equity prices, according to LSEG (London Stock exchange group) data.Despite the market’s expensive valuation compared to regional peers and other major indices, the consensus remains strong among analysts, with nearly 90% predicting record highs in the coming six months.
Furthermore ,the Sensex was expected to gain over 6% from Monday’s close of 65,655.15 to a lifetime high of 70,000 by mid 2024 ,an upgrade from 68,578 in an August poll.It was then forecast to add another 3.6% to reach 72,500 by end 2024, according to analysts.
India’s economy is the fastest growing among major economies and is expected to grow over 6% in the next couple of years.That is likely to push domestic equities higher.
Driving forces behind growth
India’s robust economic growth, currently the fastest among major economies, is pivotal in driving higher domestic equities. With an anticipated growth rate of over 6% in the next couple of years, India’s economic momentum has catalysed stock market success. A unique aspect contributing to this surge is the rise of young Indian investors. The influx of these investors, coupled with better financial literacy and increased access to financial services, has seen a surge in mutual fund accounts from under 60 million in 2016 to over 150 million today.
India’s stock market narrative unfolds against the backdrop of a global economy with conservative growth expectations. As the nation steers its financial course with confidence, the convergence of economic resilience, youthful investor vigour, and a shift towards value stocks propels India’s stock market into a spotlight of optimism, challenging and outshining global trends.