Analysts and brokers have given aggressive and conservative targets for December 2024. In this short writeup, we try to answer if Nifty likely to reach 25,000 mark by year-end.
First, we look at the bullish factors that can take the market to new highs to the 25,000 mark.
- Economic Growth: India’s economic growth is expected to remain robust, fueled by domestic consumption and government spending on infrastructure. The positive economic climate can support corporate earnings and boost investor confidence.
- Corporate Earnings Recovery: Healthy corporate earnings growth has been a key driver of the stock market rally in recent times. The continued improvement in corporate profitability can propel the Nifty further. You should monitor Q1FY25 and Q2FY25 numbers.
- Increased Liquidity: Sustained inflows from domestic mutual funds and the potential return of foreign investors could provide additional liquidity to the market, potentially pushing up valuations.
- Stable Government: The continuation of a stable government at the center may create a predictable policy environment, attracting investments and fostering market stability.
Next, we look at some points that may drag the market lower from the current levels:
- Global Uncertainty: The ongoing geopolitical tensions and potential slowdown in the global economy can create market volatility and impact foreign investor sentiment.
- Delay in Interest Rate Cut: The Reserve Bank of India (RBI) and other central banks are expected to cut the interest rates in the second half of CY24. If that does happen, it could dampen investor enthusiasm and affect stock valuations.
- Commodity Price Fluctuations: Rising crude oil prices and other commodity price fluctuations can increase input costs for companies and potentially impact corporate profitability.
- Market Valuation: The Nifty is already trading at a relatively high valuation compared to historical averages. A correction or consolidation phase cannot be ruled out.
Overall, Nifty reaching 25,000 by December 2024 is a possibility, but it’s not guaranteed. The actual outcome will depend on the interplay of various factors. Investors who want to ride the volatility should use the services of the best stock market advisor in India to ensure they can ride the wave.