Can Nifty 50 hit 25,000 by General Elections 2024? Experts weigh in
Nifty 50 hits record high on BJP victories, market hopes for stable government after 2024 elections.
Domestic equity benchmark Nifty 50 hit its fresh record high of 20,702.65 in intraday trade on Monday, December 4, on across-the-board buying after the Bharatiya Janata Party (BJP) registered victories across three major states, fuelling hopes that the country will see a stable government after the General Elections 2024.
India's economic growth outlook is strong and if the current government continues after the Lok Sabha elections next year, it may give a strong impetus to market sentiment.
Some experts see the possibility of Nifty touching the levels of 24,000-25,000 by the General Elections 2024. However, some of them believe it will be a lofty goal for the benchmark index and the market needs to discount global factors, geopolitical tensions, performance of next year's monsoon and interest rate trajectory globally.
Mint talked to several analysts and market experts to find out their views on Nifty target for the next 6-8 months. Here's what they said:
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Nishit Master, Portfolio Manager, Axis Securities PMS
After the recent assembly election results, there is now a far higher probability being assigned by the market that the current political dispensation will continue after 2024.
This development should ensure the continuation of policies that support growth; thus, the market expects India to remain one of the fastest-growing major economies in the world.
Political stability, strong economic growth, and the potential inclusion of India in global bond indices in mid-2024 can lead to the appreciation of the Indian rupee, which will lead to more significant FPI inflows in India, pulling markets towards 24-25,000 by mid-2024 national elections.
Shrey Jain, Founder and CEO of SAS Online
State election outcomes act as a sentiment booster for stock markets which in turn start factoring in the possibility of stable government post Lok Sabha elections.
Investors need to watch out for third-quarter corporate earnings which should show healthy growth due to festive season spending.
Nifty may trade in the range of 23,000-23,500 by June 2024 provided the weatherman predicts fair monsoon.
A move towards 24,000-25,000 on the Nifty 50 by June 2024 is possible if the US Federal Reserve announces a significant cut in interest rates and strong downward movement in the dollar index (DXY) leading to consistent inflows in Indian stocks from overseas investors.
As of now, this is a low-probability scenario.
Also, do not forget the joker in the pack – crude oil prices. If crude oil sustains at a higher level, then it will act as a drag on Indian stocks. Traders need to trail their stop loss while riding momentum.
Santosh Pandey, President and Head, Nuvama Professional Clients Group
For any investor to participate in the stock market, political stability is of utmost importance and with the current central government winning three big states gives us a very high probability of them forming the new government in the centre.
This is good for the economy as the current government is pro-investment and various investments done in infra, railways, roads, defence, power, and renewables are bearing fruits.
Moreover, various pro-industry schemes like PLI, etc., are allowing many corporates to invest further in their respective sectors. This entices many foreign players to invest in India through FDI.
All this would lead to higher earnings for the corporates and effectively for the country. Based on this, we expect Nifty EPS (earnings per share) to be 1,080 and 1,250 in FY25 and FY26. Given a P/E (price-to-earnings ratio) 19-20 times, Nifty can trade in the range of 22,800-23,500.
Anita Gandhi, Director, Arihant Capital
India is currently witnessing a confluence of positive economic factors. The country's macroeconomic data is showing robust growth, and there's an improvement in the manufacturing PMI.
Recent state elections have yielded favourable outcomes for the ruling party, indicating political stability. Additionally, there's a noticeable increase in the purchasing power of the general population.
The festive season has been particularly successful, likely to reflect positively on corporate earnings.
Furthermore, foreign portfolio investment (FPI) flows have turned positive, bolstering the sentiment for long-term investment in India. These combined elements are creating a favourable economic environment.
Prashanth Tapse, Senior VP (Research), Mehta Equities
India is in a sweet spot with all parameters aligning toward strong economic growth at the same time, be it lower crude benefiting us to control inflation, the US witnessing GDP growth, and a controlled geopolitical scenario.
Along with the above optimism, stronger state election outcomes show public support is towards growth.
Hence, a stable political environment could further boost investor's confidence and drive the markets higher.
We see nifty to trade higher towards 22,000 in the medium term and head more towards 24,000 - 25,000 on or before December 2024.
Meanwhile, we may continue to see a lot of volatility on the global front which would keep Indian markets in place to use all dips to accumulate India's growth story.
Santosh Meena, Head of Research, Swastika Investmart
Nifty's immediate target is 20,750, with a level of 21,000 easily within reach. The previous breakout level of 20,222 will serve as the market's floor, and with the pre-election rally underway, Nifty could climb towards 22,500 ahead of the general election.
The 'Fear of Missing Out (FOMO)' and 'There Is No Alternative (TINA)' factors will further fuel the market rally.
With clear signs of political stability and India shining as a bright spot in the macroeconomic landscape, FIIs are left feeling compelled to invest, fearing they will miss out on the opportunities India presents.
Akshat Garg, CFA, Senior Manager – Research, Choice Wealth
Following the recent state election results, wherein the Bharatiya Janata Party (BJP) defied expectations and secured victories in key states, there is a discernible momentum toward a continuation of the existing government.
This outcome, despite diverging significantly from pre-election projections, underscores the prevailing voter sentiment as we look forward to the upcoming 2024 elections.
Sustaining the incumbent government could prove advantageous for the financial landscape.
The potential benefits encompass policy continuity, fostering investor confidence, ensuring stability in ongoing and future infrastructure projects, maintaining market equilibrium, nurturing consistent international relations, and realizing the full potential of effective economic policies.
Examining the current economic infrastructure, indicators such as inflation rates and GDP projections manifest a commendable state. Notably, amid global market turbulence, the domestic financial milieu remains resilient, demonstrating an immunity to external economic contagions.
While aspiring for a surge to the 24,000-25,000 level from the present juncture may not unfold seamlessly, strategic measures such as interest rate cuts and prudent handling of the election dynamics can substantially contribute to achieving this target.
In navigating the intricate path ahead, it is imperative to acknowledge the robustness of our economic fundamentals and the potential catalysing effect of well-tailored fiscal policies.
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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
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