From Election To Budget: 5 Big Events In 2024 That Can Make Or Break The Indian Stock Market

The new year 2024 has already kickstarted. While the recently concluded year 2023 was a rollercoaster in itself, with recession, mass layoffs, geopolitical tensions, high inflation and interest rates, many countries' stock markets, including India, had a good year. Both Sensex and Nifty reached new all-time highs in 2023, breaching the 72000 and 21500 mark respectively.

But what about 2024? Will the stock market continue the bull run or turn investors' portfolios into red? Well, while many stock market analysts have given their predictions, it's noteworthy to look at these five big events coming up in 2024 that can make or break the stock market.

5 Big Events In 2024 That Can Make Or Break The Indian Stock Market

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1. Interim Budget-February 2024

India's Finance Minister Nirmala Sitharaman will present the Interim Budget 2024 on February 1. Some minor sops are expected to be offered to the salaried class by likely tweaking tax slabs. "The twin objective of minor relief to the taxpayers coupled with encouraging taxpayers to shift to a new tax regime is likely to be achieved by tweaking the tax slabs." Sunny Agrawal, Head of Fundamental Equity Research, SBI Securities, said.

On the other hand, Sitharaman has hinted that the interim Budget 2024 would not have any "spectacular announcement" as it would be a vote on account in the run-up to the general elections.

"It is a matter of truth that February 1, 2024 budget that will be announced will just be a vote on account because we will be in an election mode. So the budget that the government presents will just be to meet the expenditure of the government till a new government comes to play," Sitharaman had said last month.

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2. Lok Sabha Election-April 2024

Last month was a glimpse of investor sentiment and how stocks can behave during upcoming elections. India's stock market had already shown in December how high it soared when PM Modi-led BJP turned out victorious in three out of four state elections. That is why any negative surprise in the upcoming Lok Sabha elections can, therefore, result in shocks in the stock market.

The months preceding the elections are, however, filled with investor optimism. An analysis of the last 5 Lok Sabha polls shows that in the preceding six-month period Nifty rose an average of 13%. "The market has discounted the outcome of the general election and we don't see any major volatility during the budget and election period," said Siddarth Bhamre of Religare Broking, as per ET.

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Also Read: How The Stock Market Crash Of 1929 Led To World War II

3. Full Year Budget-July 2024

After the formation of the new government post Lok Sabha election, a full-year Budget would be presented in the Parliament, likely in July 2024. While the present government may not make any big decisions in the Interim Budget of February 2024, the full-year Budget may have a different story to tell, which remains to be seen.

4. RBI MPC Meetings-Feb, April, June, Aug, Oct, Dec 2024

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After hiking the repo rate six times back to back from May 2022 to February 2023, RBI has kept the rate unchanged from April 2023 till December 2023. But in 2024, investors would expect the RBI to cut interest rates, in sync with global rate cuts. RBI is expected to continue its stance of ¡°withdrawal of accommodation¡± till FY24 and change stance in mid-2024 with estimated rate cuts of overall 50 bps in this calendar year, as per HDFC Securities.

Also Read: Who Was James Wilson? The Man Who Introduced Income Tax In India

5. US Elections-November 2024

The year 2024 is an election year not just in India but also in the USA, UK, Russia, EU and South Korea. Besides the Lok Sabha Elections, the US election that will be held in November 2024 is expected to significantly impact India's stock market. Whether US Prez Joe Biden comes out victorious or the country gets a new president is something that remains to be seen.

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Summing it up, Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, said "2024 will be an interesting year as developed economies are likely to slow down, but challenges of rate hikes are unlikely. The year could see the Federal Reserve cutting interest rates by mid-year, which will help the equity markets. However, elections in India and the US elections are likely to result in higher volatility, which means reduced market breadth and focus shifting to liquidity and quality management within the portfolio."

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