Lagatar24 Desk
Mumbai: The Indian stock market is projected to experience significant growth in 2024, potentially gaining as much as 20% for the year, driven by government spending and sustained momentum in corporate earnings. A recent Bloomberg survey indicates that the upcoming budget is expected to boost consumer spending and infrastructure development, with over half of the 24 respondents predicting that the NSE Nifty 50 Index could advance to 26,000 points by the end of 2024. One respondent even suggested the index might climb higher. The benchmark index has already risen 12% this year, reaching a record high.
Bino Pathiparampil, head of research at Mumbai-based Elara Capital, commented on the positive outlook, stating, “Corporate earnings for the year gone by had been robust on the back of margin tailwinds and may grow above trend in the financial year 2025, keeping India’s medium-term growth story intact.”
Of those surveyed, 13 projected continued robust earnings growth for Nifty components, while five expressed concerns that optimism on future earnings might be overdone. Analysts estimate that the earnings per share of MSCI India Index companies will increase by 15.6% in 2024, compared to a 10% predicted rise for Chinese firms.
Capital expenditure is expected to be a primary focus of the government in the upcoming budget, with some analysts highlighting the importance of boosting consumer demand.
Jefferies, in a note, emphasized the potential for a well-balanced budget: “The government can please everyone with higher capex, social spending, and yet a tighter fiscal,” thanks to increased tax revenue and substantial dividend payouts from the central bank. The brokerage noted that the budget is likely to be positive for sectors related to affordable housing, capital expenditure, consumer spending, and rate-sensitive businesses.
With the combination of government initiatives and strong corporate performance, the Indian stock market appears poised for a robust year ahead.
