2023's Financial Roller Coaster: Experts Anticipate 2024 Opportunities
The financial landscape of 2023 was a roller coaster ride, with the stock market experiencing twists and turns across various sectors. As investors bid farewell to the challenges and triumphs of the past year, eyes turn towards the potential developments awaiting in the market opening of 2024.
Businessworld spoke to financial experts to understand what 2024 has in store for the stock investors.
According to Harjeet Singh Arora, Managing Director of Mastertrust, 2023 was quite an eventful financial year, marked by fluctuations in the stock market and divergent trajectories in various sectors, witnessing both growth and challenges. “As we move ahead in 2024 many things can take place in the market. Foremost among these is the anticipation of India's economy surpassing China's with a projected growth rate of 6.5 per cent, fueled by anticipated high foreign investment (FII) in the fiscal year 2024. Additionally, expectations linger on the likelihood of the FED implementing three interest rate cuts in 2024, while experts project that the RBI will maintain its 6.5% interest rate throughout the year.”
Arora further adds that more employment opportunities may also be available, but the expansion of the job market might happen at a slow pace due to expected rate cuts by the FED and cooling inflation, which will increase the confidence of businesses and investors. “In the manufacturing sector, a milestone of reaching USD 1 trillion by 2025–26 is expected, with Gujarat spearheading the charge. Investments in the automobile, electronics, and textile sectors have increased and can lead to the manufacturing sector’s growth in India,” says Arora.
“Since May 2022, the RBI has executed a series of actions, raising repo rates by 250 basis points to curb inflation, which dipped to a 4-month low of 4.87 per cent in October. However, there is an expectation that inflation rates will persist above the RBI's 4 per cent target for the medium term. The market in the first half of 2024 expects that the pace of economic growth will depend on elections and consumer spending. In contrast, in the second half of 2024, it will depend on business and investment-related activities,” Arora remarks.
Sunil Nyati, Managing Director, Swastika Investmart, despite a turbulent start in 2023, plagued by inflation anxieties, interest rate jitters, and murmurs of a global recession, the Indian market defied all expectations and is poised to finish the year with a resounding victory.
“Over the past couple of years, geopolitical uncertainty has persistently posed challenges to global markets. While the Adani saga and the Israel-Palestine conflict threw temporary wrenches in its progress, the market navigated these challenges with remarkable maturity, showcasing its inherent resilience. Although a surprise outcome in India's impending general election is the least likely possibility, any such unexpected development could pose a huge risk to the existing market dynamics.”
Nyati further adds that the market is presently pricing in more than three interest rate decreases in the United States, as well as a modest economic recession in the country. Any divergence from these expectations has the potential to disturb the market's current optimistic outlook.
“I'm maintaining a positive market outlook for 2024, taking into account the fundamental role of sentiment in shaping an initial public offering landscape. A major catalyst is the expectation that policy and political stability in India will continue to improve over the next year, giving an environment favourable for a boom in initial public offerings. Therefore, companies are expected to take advantage of the prevailing favourable investor sentiment and fuel a continued increase in initial public offerings,” he said.
As the financial community eagerly anticipates the unfolding of the new year, it remains clear that the resilience demonstrated in the face of challenges and the optimistic projections for 2024 set the stage for a year that promises both challenges and triumphs in the dynamic world of finance.
