{"id":6507,"date":"2022-01-21T15:20:41","date_gmt":"2022-01-21T09:50:41","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=6507"},"modified":"2022-01-21T15:20:42","modified_gmt":"2022-01-21T09:50:42","slug":"stock-market-outlook-for-2022","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/stock-market-outlook-for-2022\/","title":{"rendered":"Stock Market Outlook For 2022"},"content":{"rendered":"\n

After surging close to 25% since the beginning of this financial year (April 2021), on top of a staggering <\/strong>73% rise in the previous year, the markets had corrected close to 10% by the beginning of December. The primary reasons for this correction include high input costs \u2013 a result of inflation \u2013 leading to a margin<\/a> squeeze for a majority of companies and expensive valuation of Indian markets relative to other emerging economies including China. You may read a detailed discussion of these reasons here.<\/a><\/p>\n\n\n\n

After this correction, the price to earnings ratio<\/a> of the Nifty Index<\/a> stands at 26.31, which is near the 5-yr average of 27.59. Considering the fact that the combined earnings per share<\/a> (EPS) of Nifty 50 companies has risen by more than 60% this financial year \u2013 from Rs. 442 in April 2021 to Rs. 725 on 7 December 2022 \u2013 the Indian market does not appear as expensive anymore, especially when compared to its own historical average. This is to say that this correction may offer very attractive opportunities to enter quality companies from a medium to long-term perspective.<\/p>\n\n\n\n

That said, how would 2022 pan out for the market? To understand that, it may help to discuss the \u201cexpected\u201d macro events that may influence the markets over the course of the next year. Unexpected, black swan events (such as the pandemic) that may lead to a market crash are extremely difficult to predict and therefore beyond the scope of this discussion.<\/p>\n\n\n\n

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Table of Contents<\/p>\n<\/span><\/div>\n