Bourses will hold a special one-hour session on Sunday to ring in the new Hindu year — Samvat 2080 — that may turn out to be an eventful one given the upcoming general elections. The central banks may also have to take a call during the year if they should reverse the interest rate tightening cycle.

While stocks could face speed breakers on the global front because of the conflict in West Asia and erratic oil prices, a resilient Indian economy coupled with better corporate balance-sheets (read deleveraging) should see India among the outperformers.

This comes after a rather mixed Samvat 2079 during which the Sensex rose over 9 per cent, while the broader markets outperformed with the BSE Midcap index gaining more than 31 per cent and the small-cap index by 34 per cent.

While the valuations of the mid and small caps have now corrected, analysts believe that large caps may steal the show next year.

“We embark on this new Samvat with a narrative marked by ‘higher for longer’ interest rates, volatile bond yields, geopolitical conflicts in West Asia, and fluctuating oil prices,” said Pranav Haridasan, MD & CEO, Axis Securities. Haridasan, however, added that on the domestic front, the prospects for the Indian economy appear brighter and more promising. This he says will lead to Indian equities delivering double-digit returns in the next 2-3 years with the support of double-digit earnings growth.

Brokerages feel investors should take exposure in discretionary segments such as auto, hotels, real estate, and jewellery, apart from infrastructure and a few banks.

A Motilal Oswal report said the Nifty is trading at a 12-month forward P/E (price to earnings) of 17.6 times, which is at a 13 per cent discount to its 10-year average, thereby providing comfort in valuations.

“The markets want a stable government where the lead party has enough numbers,” an analyst with a foreign brokerage said. He added that another key development in 2024 may be that central banks could not only halt their interest rate hikes, but also start to look at lowering rates, which could buoy the global economy.

Morgan Stanley said there could be a rally of up to 10 per cent in the run-up to the general elections. It, however, cautioned that the Sensex could swing in a +5 to -40 per cent range based on the outcome.