Stock markets are expected to give modest returns in 2015, given that the Sensex has rallied a huge 30 per cent in 2014. A 10 per cent gains in the Sensex by the end of the year would take it closer to that figure of 30,000 points and this is what analysts are largely expecting. Here are 9 things that markets would watch out for in 2015.
Interest rate hikes in the US
This is one thing that would keep the stock markets in India volatile. A hike in interest rates in the US could put some pressure on Indian stocks as foreign funds could resort to selling. Indian markets remain vulnerable to selling by FIIs. Many analysts expect a hike in the US towards the middle of this year.
Progress on the GST Bill
The progress on the GST Bill is very important given that it's a crucial piece of legislation, which has the potential to boost GDP. It would need 75 per cent approval from parliament and the stalemate in the Rajya Sabha could pose problems for the passage of the Bill.
Crude Oil Prices
Stability in crude oil prices is a must for the markets. Any volatility poses dangers for the stock markets. A large scale fall could trigger a sell-off in equities on fears that it could lead to debt defaults from Shale Oil Producers in the US.A large scale rise in any case is not good for the global economy.
Decline in interest rate good for India
Any cuts in interest rates in India are likely to be cheered by the markets. The RBI looks set to cut interest rates in the first quarter of the year. It is almost certain that interest rates would be cut. Stock markets could be buoyant if we have a 75 basis points interest rate cuts in 2015.
Threat to Inflation
Another threat to the economy has been inflation. Recently, WPI inflation came in at zero per cent. If inflation keeps dropping we can expect a brisk revision in interest rates.
Huge expectations from govt
While the government has made the right noises when it comes to reforms, so far it has to translate into tangible gains. Any prolonged period of slackness may not go down well with the markets, given the huge expectations from the Narendra Modi Government.
Corporate Earnings must grow rapidly
Corporate earnings is the one important barometer for the stock markets. If earnings are not good enough we can expect some downside from markets.
Worries still persist
Global economic data would continue to drive markets across the globe. China and the US would remain crucial in this context.
Greece contunues to pose worries
Worries in Europe particularly Greece poses a big challenge. Recently, when fresh elections were announced in Greece due to political instability markets across the globe reacted. Only time will tell what happens ahead.