Corporate earnings, ongoing global economic slowdown, FII outflows, General Election 2024 and Union Budget 2024 were some of the key factors, which affected the market sentiment this year.
The Indian equity market faced several key events in the year 2024. Corporate earnings, ongoing global economic slowdown, FII outflows, General Election 2024 and Union Budget 2024 were some of the key factors, which affected the market sentiment this year. Domestic investors too poured money into the market partially offsetting the effect of FII selling on Indian bourses.This year earnings growth has slowed, raising concerns over valuations.
Though the mood of the stock market is affected by multiple factors in a year
US Trade and Immigration Policies: Any aggressive policy shifts by the Trump administration on tariffs and immigration could disrupt global trade dynamics.
Food Inflation: Persistent food inflation could challenge central banks worldwide, including India’s Reserve Bank.
Global Monetary Policy Shifts: Unexpected changes in interest rate policies by major central banks could impact global liquidity flows.
Geo-political scenario, Fed Fund rates (read US 10 year yields) and earnings growth for companies will be the three key events next year.
Ajit Mishra – SVP, Research, Religare Broking
“Over the next year, three primary risks-geopolitical tensions, trade frictions, and economic uncertainties-are expected to have a significant impact on the Indian stock market. Geopolitical challenges, coupled with continued trade tensions and economic headwinds in China, are likely to strain the fiscal positions of major economies. These dynamics are expected to exert pressure on sectors such as IT and Realty. In light of these risks, reducing heavy exposure to these vulnerable sectors may be prudent in the near term. Instead, focusing on defensive sectors can offer greater resilience against market volatility, providing stability amid uncertain conditions.”
Shruti Jain, Chief Strategy Officer, Arihant Capital Markets
“Geopolitical uncertainty, pace of earnings growth and a stronger dollar &retaliatory tariffs from the US-President elect are likely to impact Indian markets in 2025.”
Jathin Kaithavalappil, Assistant Vice President, Choice Broking
Indian companies’ earnings growth trajectory.- How USA President Trump’s policies will affect global trade.
- Inflation trends and monetary policy easing in India. These factors will shape both equity valuations and performance across sectors.
Narendra Solanki, Head Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers
“RBI MPC meets to be held in February will be very important events for the domestic markets as it not only be the first policy meet of the new governor but also is expected to lay the clear pathway for rate cuts in India. Any further announcement of rate cut by FED in US and Trump administration’s policy decisions which may impact global trade. Union Budget to be announced on Feb 1, 2025, which is also a key event and tells us about the sectors and priorities of the government for overall economic growth.”
Shiv Chanani, Senior Fund Manager , Equity Baroda BNP Paribas Mutual Fund
“Firstly, Indian economy should witness a gradual recovery as both government spending and corporate spending picks up. Growth in first half of current fiscal was impacted on account of national elections and monsoons. We expect a gradual recovery in the spending and hence Gross Domestic Product (GDP) growth going forward.
Secondly, easing of global geo-political tensions along with strong dollar would mean that commodity prices are likely to remain under check. This is certainly good news from India’s perspective.
Lastly, we expect innovation led themes to get stronger. We firmly believe that the journey of India from developing economy to developed economy has begun.”
Saurabh Jain, Managing Director & Head, Wealth Solutions at Standard Chartered Bank, India
“We are at the cusp of pivotal events that risk changing the economic, geopolitical, and financial market narrative.
External factors – The incoming Trump administration promises anything but business-as-usual, given his policy priorities. In China, policymakers are likely to provide further policy support measures which have the potential to revive growth, but how much is enough for the markets to be convinced remain uncertain. Finally, stronger US growth raises the risk of inflation limiting the Fed’s headroom to continue cutting rates – this could cause financial market volatility through higher US yields and stronger USD.
Domestic growth weakness – We expect the growth to recover in 2025, driven by a pick-up in government capex and policy support to reset weakening consumption given the strong political mandate received in key state elections. However persistent slowdown could weigh on the risk sentiments.
Inflation worries – Elevated inflationary pressures amid volatile food prices or rising commodity prices could delay the commencement of RBI policy easing cycle. This could drive bond yields higher, weighing on financial markets.”
Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
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