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<\/div>\nBreaching the 73,000 mark for the first time in January, the benchmark index is up over 1% this year.<\/p>\n<\/div>\n
Bengaluru: <\/b><\/p>\n
The stock market will surge to new highs by the end of June and gain nearly 9% in 2024, despite already lofty valuations, according to analysts polled by Reuters, who said a correction in the next three months was unlikely.<\/p>\n
The BSE Sensex index, closely tracking the U.S. S&P 500 index, climbed nearly 19% last year on expectations global central banks will cut interest rates in 2024 and India’s economic growth will outpace its peers.<\/p>\n
Breaching the 73,000 mark for the first time in January, the benchmark index is up over 1% this year.<\/p>\n
That is despite fading speculation about early rate cuts from the U.S. Federal Reserve triggering foreign portfolio outflows from many emerging markets.<\/p>\n
Optimism in the stock market has also been driven by expectations the ruling Bharatiya Janata Party, led by Prime Minister Narendra Modi, will retain power in the upcoming national election.<\/p>\n
The Feb. 12-21 Reuters poll of 28 equity analysts forecast the Sensex index would add another 4% to reach a high of 76,000 at the end of June, far above the 70,000 level expected in a November poll.<\/p>\n
From Tuesday’s close of 73,057, the BSE index is forecast to rise 7.5% to 78,550 at the end of 2024. That would be around a 9% gain for the entire year.<\/p>\n
“The Indian economy remains a ‘star performing’ economy against other emerging markets. Moreover, we firmly believe it will likely continue its growth momentum in 2024 and remain the land of stability against the backdrop of a volatile global economy,” said Neeraj Chadawar, head of quantitative equity research at Axis Securities.<\/p>\n
“The entire setup for the market is very constructive at this level because the market is looking at the policy continuity in the upcoming national level election.”<\/p>\n
India, the fastest-growing major economy, is expected to expand nearly 7% this fiscal year and grow over 6% in the next couple of years.<\/p>\n
All but one of the 26 respondents to an additional question said corporate earnings would increase over the coming six months.<\/p>\n
When asked about the probability of a market correction over the coming three months, a near 60% majority of respondents, 16 of 27 said it was unlikely, including two who said highly unlikely. Nine said likely and two said highly likely.<\/p>\n
“It is very difficult to call whether there is a major correction. But right now I think India is in a good macro situation and the concerns are more around a little bit of high valuations than anything else,” said Rajat Agarwal, Asia equity strategist at Societe Generale.<\/p>\n
At a price-to-earnings ratio of 24, the BSE index is trading above its long-term average of 20, suggesting any further rise will only add to concerns around valuations.<\/p>\n
The Nifty 50 index is forecast in the poll to gain over 2% from Tuesday’s close to 22,750 at the end of June and 23,925 at the end of 2024.<\/p>\n<\/div>\n