What is the future of the Indian stock market?
What is the expected return of the stock market in the next 10 years?
As of Sep 2023, Sensex is at 66800 levels and Nifty is at 19901 levels. 10 years ago, in Sep 2013, the Sensex was at 20263 levels and the Nifty was at 6115 levels.
If someone could have invested Rs 1 Lac in Sep 2013 in Sensex, the present value would be Rs 3.29 Lacs. In Nifty, it could have become Rs 3.25 Lacs.
Against this uncertain global backdrop, India has increasingly been in the spotlight for being among the fastest-growing major economies.
India has never been in a stronger position than it is today. As a country, we are fortunate to see more tailwinds and very few headwinds. India benefits greatly from political stability. This isn’t going to change in 2024 either, in my opinion.
To understand the future of the Indian Stock Market and to predict the Sensex and Nifty 10 years from now. Let’s look at what is working in India’s favor right now!
1) Food & Vaccine Security:
We have food security, we have vaccine security. Since India is a domestic consumption-based economy, the economy is less dependent on the global economy. Unlike countries that rely on exports, we are not overdependent on exports. We have such a large domestic market that whatever is produced is consumed here.
2) Imported Crude at Lower Prices:
We have demonstrated the ability to negotiate the import of crude at lower international prices, which has worked well for our foreign exchange purposes. Since the Russia-Ukraine War, India has emerged as one of the world’s leading consumers of cheap Russian crude oil.
3) Steady Increase in Tax Collections:
There has been a steady increase in tax collections owing to better compliance by people. In fact, tax collections last year grew 18%. Percent, which was higher than even the budgeted estimates. When I talk of tax, I’m talking of direct and the GST.
4) High-Frequency Indicators are solid:
Almost all high-frequency indicators are performing well, including a smart recovery by sectors that have been impacted by COVID-19, such as aviation and hospitality, amongst others. Probably aviation and hospitality are doing much, much better now than they ever did.
5) Strong Public Digital Infra:
Aadhaar, UPI, and account aggregators are just a few of the DPI initiatives that India, a leader in the industry, has successfully adopted. Due to these initiatives, financial and social inclusion has been possible in a variety of industries, revolutionizing the digital world.
We are reaping the benefits of having put in place a strong public digital infrastructure, which much of the world now wants to emulate.
6) Financial System in Strong Position:
The Indian banking and financial system, which had its troubles in the earlier days, is now in a much, much stronger position. All banks are well capitalized, the non-performing loans have come down sharply, and the system is strongly regulated.
7) Govt Making Efforts to Boost Manufacturing:
We have a government that is pulling its weight to position the country as a global manufacturing hub. And we also have a government that has aligned itself with the goals of decarbonizing the Indian economy in an orderly manner.
These are just a few of the many reasons why India is looking good and why India is looking attractive to the world. The India story continues to be an attractive one for the long haul. Isn’t it?
Indian Stock Market Prediction: The Next 10 Years
Having discussed the outlook for the next 10 years, let us do a projection and prediction for the next 10 years on the Indian Stock Market.
What will be Sensex in 2030 or 2033?
What will be Nifty in 2030 or 2033?
What is the long-term expected return from the Indian Stock Market?
Scenario 1
If the market is delivering similar returns as of the last 10 years,
- At a 12.67% p.a rate, the Sensex is expected to touch 220000 levels.
- At a 12.52% p.a rate, the Nifty is expected to touch 64700 levels.
Scenario 2
If you think, the market will not deliver 12% p.a returns in the next 10 years, we can assume a more conservative return. We can assume 3% less than that of the last 10 years.
If the market is delivering a conservative return compared to the last 10 years,
- At a 9.67% p.a rate, the Sensex is expected to touch 168000 levels.
- At a 9.52% p.a rate, the Nifty is expected to touch 49400 levels.
Scenario 3
If you think, the market will deliver more than 12% p.a returns in the next 10 years, we can assume a more aggressive return. We can assume 3% more than that of the last 10 years.
If the market is delivering an aggressive return compared to the last 10 years,
- At a 15.67% p.a rate, the Sensex is expected to touch 286000 levels.
- At a 15.52% p.a rate, the Nifty is expected to touch 84200 levels.
Overall, you will be able to beat inflation by investing in the Indian equity market for the next 10 years.
Conclusion
India is in the best possible position to attract investors over the next ten years because of its compelling development story, solid economic base, stable government, and ongoing structural changes.
The nation’s technological breakthroughs, investment potential in the banking and financial sector, renewable energy, electric vehicles, and manufacturing/PLI present good chances to produce alpha returns.
Indian markets are made even more alluring by the inexpensive values of steady growth. But please don’t get into investment by just searching through social media platforms like Quora, Facebook, Twitter, etc. A professional financial planner will guide you better.
Stay Safe. Happy Investing!
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