Will the market continue to go up ?

In March 2023, I wrote the article when will the market go up. I presume now the question is, will the market continue to go up ?

Capital Expenditure

Capital expenditure from both industry and the government is going up. Whenever capital expenditure goes up, it is generally good news, as this indicates that volumes are going to go up and therefore there is growth in the economy.

Imagine a world where the economy dances to a positive tune. Picture this: big players like the US Federal Reserve and our own Reserve Bank of India are planning to cut interest rates. That means more money flowing into the market, boosting the game for stocks. Plus, companies investing more in the country’s growth are shouting out loud in the GDP numbers. That’s a good sign!

Tax Collections

Now, let’s zoom in a bit. Despite high interest rates, our country’s tax collections are climbing steadily, and industries are pumping out goods at a rapid pace. This reflects a growing economy. India’s recent GDP growth is also impressive, showing a healthy increase in the money made by the country. It’s like a badge of honor!

Sure, there are some concerns, like trade deficits and rising prices due to global problems. We’ve also got elections coming up, which could shake things up a bit. But in the midst of it all, one thing’s clear: India is proving its strength in the economic race.

Corporate Earnings

Recognized as the fastest-growing major economy in 2023, India is standing tall. If you look at the corporate earnings, we have been doing remarkably well.

High Frequency Updates

The stock market is like a puzzle with lots of pieces. Right now, those pieces—rate cuts, growing GDP, strong tax collections, and a powerful industry—are falling into place, suggesting a bright future for investors. It’s an exciting tune playing out in the market, inviting you to jump on board and be part of India’s thriving economic journey.

Conclusion

Therefore the question, should you continue to invest ? My answer would be a resounding Yes.

This is for multiple reasons :

1. We are NOT in a bubble where the market will fall down for any reason
2. Market going up is backed by strong corporate earnings and very good macroeconomic indicators including market sentiment
3. Interest rates will fall down and therefore corporates would have easy access to money which in turn would drive the market further up

As I write this article, market has moved from 70K to 72K in 2 days. Sensex hitting 1 lakh is not too far. India wishes to be a 5 trillion dollar economy and developed country by 2047 and therefore such ambitions require focussed plans and therefore I positively feel that we have not hit a high yet. If you are in for the long term, you are rewarded !

Finally there is election around the corner and with a decisive victory for the central government and a stable policy, things would certainly accelerate.

Reference

1. Private Capital Expenditure
2. India High Frequency Update
3. GDP Growth
4. Market Outlook

Disclaimer: Please reach out to your financial advisor before making any investments

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