In December 2023, the Indian stock market demonstrated a noteworthy bounce-back and expansion, outdoing many of its international rivals. The upsurge include the recent massive electoral victory of the ruling party and the impending announcement of the Union Budget for FY 2024-25, creating a wave of optimism among investors.
New Delhi: The Indian stock market has remained on a high in December 2023, carrying forward the positive wave from the previous month. Even amid local and global challenges, the market has grown resilient and robust, surpassing many of its global contemporaries. This piece discusses what has fueled this success and how the forthcoming Union Budget for FY 2024–25 could further stimulate this growth.
Factors Behind Rise Of Indian Stock Market
A major factor shaping the Indian stock market is the recent electoral sweep by the governing party, the BJP, across Rajasthan, Madhya Pradesh, and Chhattisgarh. This political triumph has bolstered investor confidence, promising a positive effect on the market. The government’s commitment to bettering infrastructure, energy, and urban development also contributes to market growth projections.
Moreover, the center is likely to reduce petrol and diesel prices ahead of the Lok Sabha polls that are to take place next year. The prices of crude oil have come down in the international market and this is expected to bring down the prices of petrol and diesel in the domestic market of the nation.
Union Budget 24–25 And Stock Market Growth
The interim budget for FY 2024–25 is a much-awaited event for the Indian stock market. Predicted to unveil growth-fueling measures, it could further stretch the market’s positive performance. Deloitte India speculates that the budget may funnel funds into enhancing the port and shipping sector, green energy, and urban infrastructure. Likely to draw increased capital spending, these investments could restore vitality to the market.
Moreover, the government’s strategy to reroute savings from subsidies to spending aimed at sustainable income growth among rural households may revitalize the rural economy’s disposable income. This, in turn, could positively ripple across various stock market sectors.
Considering economic expansion, India has already registered a 7.8 percent growth rate in the initial quarter. Deloitte India revised its growth forecast, predicting a range of 6.5 to 6.8 percent for FY24, further bolstering the stock market’s potential, as per a report in the Mint.
Union Budget for FY 2024–25: Expectations
The Union Budget for FY 2024–25 will likely play a pivotal role in preserving and boosting market growth in the coming fiscal year. Investors and market players are eagerly anticipating the budget reveal to understand the government’s future plans and policies. With its spotlight focused on sectors like infrastructure, energy, and rural development, the budget could encourage investment and pave the way for growth opportunities.
In sum, the Indian stock market has exhibited remarkable resilience and growth in December 2023. The political victories, along with the expected measures in the Union Budget, have primed the market for even greater success in FY 2024–25. Investors and stakeholders are keenly awaiting the budget announcement in anticipation of capitalizing on the potential opportunities on offer.