The Indian stock market is set for moderate growth in 2025, driven by strong macroeconomic fundamentals and government policies. Experts predict that factors such as corporate earnings revival, global geopolitical stability, and the US Federal Reserve's interest rate policies will influence market trends.
Currently, the Nifty 50 index is up 9% in 2024, following a 20% gain in 2023. While growth prospects remain intact, challenges like expensive valuations and slowing global growth could impact performance in 2025. Economic reforms, tax policies, and budgetary measures will be crucial triggers, alongside global events like trade policies under Donald Trump and US-China relations.
Trilok Agarwal, Fund Manager at Ambit Asset Management, emphasized the importance of sustained economic growth, government reforms, and corporate earnings recovery. He warned that inflation, recession risks, and currency fluctuations could affect foreign investments.
Amit Ganatra, Head of Equities at Invesco Mutual Fund, highlighted the need for consumption and investment growth, while cautioning against rich valuations. S Naren, CIO at ICICI Prudential AMC, noted the overvaluation of small and mid-cap stocks and suggested investors remain vigilant about valuations.
To manage risks, experts recommend diversified portfolios and multi-asset strategies. Hybrid funds, offering exposure to equities, debt, and commodities, can balance asset allocation effectively.
Sectors like IT, banking, FMCG, and infrastructure are expected to offer attractive opportunities. Deepak Ramaraju of Shriram AMC sees FMCG as appealing due to valuations, while IT could benefit from increased discretionary spending. Banks may recover post-rate cuts, boosting credit growth.
In summary, while India’s long-term growth outlook remains strong, investors should focus on fundamentals, monitor valuations, and diversify to navigate risks and capitalize on opportunities in 2025.
