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What Is The Stock Market’s Future In India?

Despite high crude oil prices, increasing inflation rates, and global uncertainty, Indian markets are supportive to investors, showing their strength and growth story. The Sensex and Nifty indexes are up by 6% so far in 2022.

Statistics that Indicate a Promising Indian Stock Market

Experts believe that growth drivers are in place that will impact the Indian stock market positively and make it the world’s 3rd-largest stock market before the end of the decade.

  • NIFTY Indexes 

Experts say that there is a high chance that both Bank Nifty and Nifty indexes of the National Stock Exchange of India (NSE India) will reach a new high with support from global markets. It will make the Indian market the first market globally to touch a new lifetime high. While the Nifty50 may touch 18,500 soon and Bank Nifty may reach 42,500 by the end of November 2022.

  • SENSEX Index 

Experts expect BSE (Bombay Stock Exchange) Sensex to cross 65000 by December 2022. Following a global market rally powered by the ease in US retail inflation, the domestic Indian market has leapt to reach its highest.

  • The third-largest Economy

It is expected that the Indian economy is expected to cross the 5 trillion dollar mark by 2025 and will become the third-largest economy globally by 2027. Open an online demat account to invest in the growing Indian markets.

  • Foreign Institutional Investors (FIIs)

FIIs returned strongly in the mid of 2022, and are expected to remain positive towards the Indian economy’s growth story. There has been collateral damage with a large part of the FII selling earlier because the markets were going through crises. 

Few factors that impact the stock market

The past performance of stock markets does not indicate its future return potential, making stock market investments risky. Therefore, familiarising with the factors that impact the stock market is also crucial. The following factors will help investors to understand the ups and downs of the market:

  • The speed of news dissemination: Global news and the speed at which it is disseminated can add to the market volatility superfast. As a result, the markets start to get imbalanced reactions from market participants. 
  • Interest Rates

Interest rates are a key driving force of ups and lows in the stock market. Rising rates dampen stock prices. Simply because when the interest rates increase, investors would prefer fixed-income investments. But inflation is also factored in while making investment decisions. Therefore, declining interest rates impact the stock market positively. One of the best advantages of a demat account is that it is an online repository for numerous types of securities in various asset classes, including fixed-income. 

  • Market sentiment

Market sentiment shows the general attitude of investors toward the stock market. It can be said to be the psychology of market participants. Largely it is determined through the price movement of financial security. Rising stock prices refer to the bullish market sentiment, and falling prices represent the bearish market sentiment. Typically, it is a collective approach, but individual perception also matters in the stock market. But, different market participants trade based on several aspects by focusing on the fundamentals and technical factors. Technical factors and market sentiment often dominate the short run. 

  • Growth prospects of prominent industries 

Stock markets are majorly affected by the prominent segments in an economy because they create new investment opportunities. When major industries in an economy decline, it may impact the entire market negatively, and major market indices will be affected significantly. Declined segments weaken an economy and cause falling stock prices. With effective and transparent policies, the Indian government has achieved a lot in diverse sectors, like infrastructure.

Thus, these are growth inputs indicating the stock market’s future in India. The state of the economy is a big-picture that drives the stock market, and as per experts, the long-term outlook of the Indian stock market seems promising at the moment.

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