It would be an understatement to say that Indian equity markets had a turbulent year in 2018. The gargantuan wealth creator that it has always been, Indian stocks went into a tailspin in the latter half of the year with headwinds such as fuel price, US risk-off and the plunge of rupee striking.
Billions were erased in the span of a few trading sessions and the mood was brooding may a time. However, as the year draws to a close, some of the latent strengths of the market are manifest. With more than $2 trillion in market capitalisation the Indian markets retains its place among the top 7 in the world.
Some of the factors that whiplashed the Dalal Street have now faded away, even as the New Year is around the corner. The crude price has receded taking the sting off the fuel price nightmare and the rupee is crawling back. Then comes political uncertainty, a big scare for the financial markets, which always prefers predictability and certainty.
The 2018 elections to five state assemblies were keenly watched by the markets. Foreboding was in the air after exit polls suggested the ruling BJP would suffer setback in key states.
However, even as the BJP lost three major states - Rajasthan, Madhya Pradesh and Chhattisgarh, the markets weren't overly panicked.
As the year ends, the BSE Sensex is up almost 6 percent in the year, while Nifty is up 3 percent. That was probably not the outcome predicted by many when the markets were in the doldrums.
Now, what's the outlook for the markets in 2019?
Here's a pick of insightful comments from leading financial experts:
"Despite scepticism on the Street, we look forward to 2019 with a fair bit of optimism. I believe Calendar 2019 is going to be a year to two halves. Given the concerns around election cycle in India and global risk-off, the first half of the year could be volatile from market's perspective. Global risks have come to the fore with apprehensions about impact of trade war, US recession in 2019 and rate hikes by global central banks impacting business and consumer confidence."
-- Pankaj Murarka, founder of Renaissance Investment Managers, writing in the Economic Times
"The market looks ripe for a major up move in 2019. The lower trajectory of crude price, low inflation regime, softening of sovereign yields, relatively stable currency after the mayhem in INR and partial recovery in domestic earnings (ex-PSUs) are healthy signals for the market."
-- Amar Ambani, President and Head Of Research of YES Securities (India) Ltd, speaking to Moneycontrol
"We expect markets to consolidate and form a higher base around the 10,400 levels for Nifty. The index is likely to witness some consolidation before any range breakouts on the upside. The overall structure for the Indian markets remains bullish and likely to see levels of 11,600-11,850 by year-end and Sensex around 39,3,650 levels."
-- Manav Chopra of Indiabulls Ventures, speaking to the LiveMint
"For a retail investors 2019 would be a good year to remain invested in equities through mutual funds systematic investment plans. While broad market may not be very attractive, there could be significant value in select small and midcap names with strong credentials. The sharp correction in small and mid-cap segments in 2018 has created immense value investing opportunities. Overall, crude oil price drop, satisfactory revenue growth, optimistic capex cycle and likely increased government spending may help many names."
-- Prakarsh Gagdani, CEO of 5Paisa.com, writing in the Financial Express