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    • Bye-bye 2018, welcome 2019

      Publish date: January 4, 2019

      By: Sandhya Kannan, Head – Content

      Standing on the cusp of a new year, it is a good time to take a look at the past 12 months and what to expect for the coming twelve. Overall, 2018 was a bit disappointing for investors all over the world. There was little comfort for Indian investors as the Nifty 50 index was among the best performers with a sombre 3% return. Analysts expect 2019 to be better for investors with around 10-15% returns. However, there are a few factors that you should watch out for when you invest during the year.

      Factors that can affect the Indian stock markets in 2019

  • US Fed rate

    Globalisation has not only made the world a smaller place; it has also ensured that change in the economic policy of one country affects another. The US Federal Reserve (like the Reserve Bank of India) controls the interest rate and money supply in the US economy. But any change in the interest rate by the Fed has an impact on the rest of the world. And this includes India. A hike in interest rates by the Fed could result in a selloff by foreign investors in the Indian stock market. And if the US economy maintains its momentum through 2019, the hikes in interest rate by the Fed could negatively impact Indian markets.

    Also read: 5 reasons why US Fed policy affects you

  • China-US trade issues

    It can be said that 2018 was the year of global trade wars. The US President Donald Trump launched trade wars against the European Union, Mexico, Canada and most importantly China. A continuation of this US-China trade war could result in collateral damage to emerging countries like India. But in response to the rising uncertainties in trade with the US, China has sought to strengthen trade ties with India. The Chinese President Xi Jingping suggested that India and China should set up a bilateral trade target of $100 billion by 2020.

    Also read: 4 things to know about impact of trade wars on India

  • Oil prices

    This is another big factor to take into consideration going into the New Year because historically, Nifty movement has been inversely proportional to crude oil prices. In 2018, investment gains were capped as a result of the rise in crude oil prices. And while the surge in oil prices has reversed, there could be a price rise again depending on US actions against Iran’s imports. India (one of 8 countries) is allowed to import oil from Iran despite US sanctions but the exemption ends on 4 May 2019 after which the story could take a new turn.

    Also read: The Impact of Crude Oil Prices on Indian Stock Markets

  • General elections

    India is set to hold its national elections during April-May 2019. Right now, the outcome is quite uncertain after the opposition party won major victories in recent state elections. The pre-poll budget in February and the inevitable populist measures announced by the government and the opposition could have an impact on the stock markets

    However, experts believe that the outcome of the general elections may weigh on the market only in the short term since data over the past many decades indicate that elections do not create major disruptions in the economic structure or business cycle.

    • Stock markets may remain volatile in 1st half of 2019   Read more

    • Impact of general elections only in short term   Read more

  • Rs 1.1 lakh crore

    Domestic Institutional Investors (DIIs) have invested ~ Rs. 1.1 lakh crore & Foreign Institutional Investors (FII) have sold worth ~ Rs 25,000 cr in equities in calendar year 2018. However, 2019 could provide better opportunities for investors since earnings growth could pick up in 2HCY19.


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