Stock market: Effect of Omicron, budget, Polls and the global trends for 2022.
Though there have been many reasons for the falls and ups at the stock market 2022 the main driving reason behind the drastic upheavals has been the pandemic. The Union Budget will be expected to be more pro-reforms, especially after the repeal of the draconian farm laws. Globally the banks will be moving towards a tighter interest regime in the wake of the inflationary pressure. All these processes will directly impact the stock market and nifty and the investors will have to take decisions likely.
2021 was a rewarding year for equity investors. The 30- benchmark Sensex soared past the momentous 50,000 and 60,000 levels this year after the pandemic triggered crash in March 2020. The year 2020 saw a worst kind of decline due to the sudden lockdowns and restrictions happening across the globe but 2021 was a sigh of relief for business investors and stock developers. It is expected that the strong momentum on the IPO front is likely to continue with the listing of state owned LIC and many other companies in the pipeline. Till December 29,2021 the Sensex had gained 10,055.16 points or 21.05% and the index climbed to it’s all time high of 62,245.30 points on October 19. The recovery of investments will be the priority of the investors. The upcoming budget is expected to focus on the growth and momentum. On the other hand the domestic stock market has seen the participation of retail investors on a rise so that there is no over dependence on the foreign portfolio investments. The Sensex is expected to close at 71,000 and the Nifty at 21,000. In the worst case scenario Sensex will close at 53,000 and the Nifty on 16,000.
Siddharth Khemka, Head Retail Research at the Motilal Oswal Financial Services Ltd. Said that global factors like US Fed’s taper announcement along with potential risk from the Omicron variant are likely to drive market direction next year. Meanwhile at the domestic turf the Union budget, the five state elections and RBI’s policy would direct the direction of the market. Oil prices, bond yields, foreign investments and US Dollar Index will also play a crucial role in determining the state of affairs at the stock exchanges not only in the country butalso in the World. BSE had decline by 7% in the 2021 year end due to the up surgence of the Omicron variant. The year 2021 was far better than the 2020 for investments and many growth patterns are expected to develop based on the asset monetization and disinvestment policies of the government. The future market will be more dependent on green energy, ethanol and new generation business. The Nifty is expected to grow up by 12 % to 15 %. The IT, Telecom, Capital Goods, Cement, Real Estate have fared well in the year 2021 and the trend is expected to continue. Banking and Automobiles have declined in 2021 and may show strong emergence in 2022.