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Markets had a stellar performance in the calendar year 2023. Can they repeat their performance in 2024? Seems unlikely. We have a number of imponderables, geo political news, uncertainty and of course the general elections slated for April-May 2024.

The two positives in a sea of worries is the fact that compared to global economies we are far better off on most counts and therein lies the silver lining. Is this silver lining good enough for another rollicking year?

Very clearly, no. Decent year with ups and downs and may be better than most countries globally seem likely. But a great year, most unlikely.

Let’s look at some of the events unfolding. The Russia-Ukraine conflict seems to have become never ending. One expected it to be short and people were forecasting it to be a little more than a skirmish. It's already 23 months old and will complete two years on February 24, 2022.

Even before this could get over, we have the Israel-Hamas conflict which has become over four months old. From the beginning of calendar year 2024, we have the Houthi issue becoming big and likely to escalate. It's already involved the USA, UK, Iran and Israel amongst other countries.

How much more and at what cost is currently debatable. It has already affected trade and shipping and there is escalation of freight rates affecting shipping and resources availability. Where and when this would end is unknown. It also has the potential to involve many more countries than the handful currently.

The US is experiencing rising inflation and elevated interest rates and this happened for the most part of 2023. Yet, their markets are also at lifetime highs. It is believed that interest rates in the current calendar year would soften, but the fear of inflation still haunts them.

With conflict currently on in three places around the globe, gold is at its high and causing concern as along with gold, even crude oil is at elevated levels.

India is comparatively in a sweet spot with a fair degree of self-production and consumption. The two items where we are dependent on imports are crude oil and edible oil. While efforts are being made to step up production of both, it's only work in progress currently and we have a long way to go.

Further the good part is that interest rates seem to have peaked and though rate cuts may be some time away, very clearly, we are nowhere near rate cuts in the immediate future. The most likely possibility is that interest rates would remain at present levels for the time being.

India is one of the few countries which are witnessing a decent GDP growth and we could be in the top 5 per cent of global economies as far as growth is concerned.

Our rank is rising in global economies and we have overtaken Hong Kong recently or in the latest round. While this rise is good and helps the country's image and standing, we need to ensure that we are able to get stronger on all fronts.

Elections for the Lok Sabha are due in the next three to four months and indications available point to the return of the present government. The stock markets believe that the government of the day would be voted back to power.

This would imply stability and continuation of infrastructure led growth and development, which is the need of the hour.

While this would lead to markets gaining in the immediate short term, we need to factor in the current valuations which are no longer cheap and the fact that markets have not only gained substantially, but risen across the board.

In the short to medium term leading into the markets, things look positive. Post elections the inevitable correction of a larger magnitude is imminent. This would be if the government of the day wins or loses. If it wins, euphoria followed by correction and if it loses, disappointment, hence sharp fall.

The market has given three to four months with clear direction in advance to plan your strategy. If one fails to take advantage of the same, there is no one but oneself left to blame.