Sensex, Nifty ends 2024 with 8 to 9 per cent gain
Among Nifty50 stocks, Tata Group’s Trent, Mahindra & Mahindra and Bharti Airtel had a stellar run. Hit by rising competition Asian Paints and IndusInd Bank fell sharply.
While the market remained resilient to worsening geopolitical tensions, especially in the Middle East, and quickly absorbed the general election result outcome during the first 9 months, investors’ confidence took a hit after corporate earnings growth slowed down in Q2FY25.
Further, a win by Republican candidate Donald Trump in the US Presidential election, its impact on the bond and currency market, and the US Fed’s decision to go for fewer rate cuts in 2025 become way too much for the expensive Indian market to sustain its valuation.
Going forward, the first few months of 2025 are expected to remain volatile. Trump’s taking over the chair and its implications for international trade will guide the global markets. The Union Budget and the Q3 earnings will also influence the market’s trajectory in the near term.
Mohit Batra, Founder, MarketsMojo said that slowing economic momentum poses risks to corporate earnings growth. “If these economic headwinds persist, sustaining current high valuations could be challenging. Geopolitical uncertainties, including potential policy shifts in the US, may also weigh on market sentiment. Given these factors, we expect the market in 2025 to be more stock-specific, with selective sectors driving performance rather than a broad-based rally. Investors should prepare for a more challenging environment compared to the relatively straightforward gains of 2024,” added Batra.
However, Deepak Ramaraju, Senior Fund Manager at Shriram AMC feels that the stock market in 2025 is set to ride on strong economic growth and government efforts to boost infrastructure and digital innovation.
“Sectors like capital goods, technology, financial services, consumption, and healthcare are expected to shine, with emerging areas such as semiconductors, electronic and manufacturing, renewable energy and electric mobility grabbing more attention,” said Ramaraju.