What Is the Stock Market's Future in India?  | Motilal Oswal

Stock Markets Future in India

After October of 2001, the world was in a state of flux. Technology was advancing, but spending in the sector was slowing down in the only economy that counted at the time, the USA. After 9/11, the US forces came down strong on the Taliban army, initiating ‘Operation Enduring Freedom’. Technology companies were at an all-time low, bracing themselves for an upcoming anxious few years. During that very period, the then CEO of Infosys, Narayana Murthy commented, “There’s fog on the windshield.” Analysts think it's time to rethink the famous comment. 2021 has ended, and though it was a good year for the stock market, the excitement is fading. 

  • An Uphill Climb

Most brokerage firms are laying the foundation of notions for a stock market that is going to be trudging along instead of racing ahead. Reports from financial analysts are also confirming this. The expected nature of the Indian stock market, or any stock market for that matter, is to be volatile with periods of highs and lows. Still, investors who have just achieved periods of high profits cannot believe it may end soon. But will it end, or simply stabilise?

  • Statistics About the Stock Market Future

The year 2020 saw the Sensex in a rally of 15.75%. The Nifty wasn’t left out and rose to 14.90%. A good year for the indices, 2021 ended with just as good a run. The Nifty and the Sensex have risen to 20%. In the past two years, the midcaps were the stocks that experienced the good life. The Nifty Midcap and the Nifty Smallcap Indexes, with their previous losses, stole the limelight, closing at 35% profits in 2021. So, why the glum look on investor’s faces? The start of 2022 saw the Bank Nifty with low gains. Swings in rates, inflation, a comeback by NPAs, etc, are all contributing to banking burdens. Thus the stock market future looks a tad bleak. 

  • Downhill Trend

The Nifty 50 shows a recession at 6% and this is going higher. With an all-time high in October 2021, the fall is akin to a break in a nearly single-sided rally driven by huge liquidity. The most important factor that laid bare the ‘beasts’ in the stock market in the previous two years was cash. In December 2021, FIIs or foreign institutional investors sold securities to the tune of Rs. 12,986 crores ($1.7 billion). Forget the massive outflow, but it was the third consistently active month of the outpouring of foreign cash. As of December 2021, there was selling going on in a back-to-back fashion. The Indian stock market relies on the steady inflow of funds and this is the lifeblood of emerging markets. A balance has to be struck with a gush of wealth pouring in as much as it pours out. Hence, with this unhealthy balance, the Indian rupee fell and inflation has struck. 

  • What the Future Holds

The time when stocks are down is the time to buy them. You can do this easily through Motilal Oswal. Holding on to your stocks for the long term will have you reaping good earnings and as markets fall, they will also rise at a point in the future. This is the time to invest for the long term as these stocks will give you an advantage. 

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