Investment strategy: How to invest in 2025 after Sensex, Nifty 50 deliver 13% returns in 2024?

Indian Stock Market: The Indian stock market has shown remarkable resilience in 2024, with benchmark indices Sensex and Nifty delivering double-digit returns despite global economic challenges and market volatility. This performance highlights the strength of India’s economy amid geopolitical tensions, elevated inflation, and sluggish global growth.

Benchmark Nifty has gained almost 3,000 points or 13.5 per cent in 2024 so far while Sensex has rallied 9,500 points or 13 per cent. Both benchmarks hit multiple peaks during the year but also witnessed strong declines. Currently, they are around 6 per cent away from their latest peak hit in September.

Nifty has given positive returns in eight of the 12 months so far this year. It has climbed over 2 per cent in just five sessions of December after two consecutive months of losses.

As we approach 2025, investors are evaluating strategies to navigate uncertainties while capitalising on potential opportunities. Market experts offer actionable insights for the year ahead, let’s take a look:

Investment Strategy Insights for 2025

Jigar S. Patel, Senior Manager – Technical Research at Anand Rathi Shares and Stock Brokers, forecasted consolidation for Nifty in the range of 24,000–24,500 before a decisive upward move. He recommended focusing on quality stocks that suffered during recent corrections and maintaining a long-term bullish outlook.

Anupam Roongta, Market Analyst, Share.Market highlighted that the global economy is grappling with multiple challenges, including geopolitical tensions, high inflation, and slow economic growth, all of which are contributing to increased volatility and uncertainty in the markets.

He emphasised that market downturns are a part of the cycle and while they might feel intense at the moment, they don’t last forever. Markets have a history of bouncing back, and long-term investors usually benefit from staying invested rather than trying to time the market, Roongta said. He advises investors to remain invested and avoid attempting to time the market. “Long-term investors benefit by staying consistent with SIPs and considering buying the dip if convinced of the quality of their investments,” Roongta said. He also suggested reassessing portfolios to ensure alignment with individual investment goals, risk tolerance, and time horizons.

Trivesh, COO of Tradejini, said India remains resilient as record-high domestic equity ownership and steady SIP inflows are countering FII outflows. He pointed to midcap stocks as long-term growth opportunities but advised monitoring global oil prices, given their potential market impact. A staggered investment strategy, he said, helps capitalise on market corrections without excessive risk.

“Even with global uncertainty, I feel there are clear opportunities for prudent investors. Focusing on fundamentally strong stocks with strong earnings potential can mitigate risk. A staggered investment approach is ideal, as it allows investors to capitalize on market corrections without overexposing their portfolios,” advised Trivesh.

Sectors to invest in

Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities, recommended tilting portfolios toward defensive sectors like pharma, FMCG, and IT. Highlighting the strong performance of pharma stocks in Q2 and their resilience, Sheth sees opportunities in these sectors amidst global uncertainty. Sheth also suggested adding Gold and Silver to portfolios to enhance safety.

Jathin Kaithavalappil, Assistant Vice President at Choice Broking, echoed the need to focus on defensive sectors while maintaining liquidity to capitalise on market corrections. He advised spreading investments across fundamentally strong companies with a long-term outlook.

Atul Parekh, CEO of Bigul, stressed leveraging government-driven public and private capital expenditure. He recommended focusing on sectors benefitting from manufacturing and infrastructure growth while diversifying portfolios to minimise foreign investment risks. Parakh views post-election government initiatives as key to reviving public capex and boosting economic confidence.

“We suggest a three-pronged investment approach: first, minimising foreign investment risks through careful portfolio construction; second, capitalising on anticipated government-driven public capital expenditure; and third, identifying potential private capex growth sectors. India is an exciting opportunity from an investor’s perspective, offering opportunities in multiple sectors that are not typically available in other emerging markets. Investors should carefully position themselves on the possible infrastructure and manufacturing growth, but also maintain diversified and risk-managed portfolio approaches,” Parekh said.

Ajit Mishra, SVP of Research at Religare Broking, suggested a selective approach post-correction. With IT and banking showing relative strength, Mishra urged investors to focus on sectors offering earnings visibility and attractive valuations.

Despite the challenges faced in 2024, Sensex and Nifty have proven their mettle, delivering substantial returns and setting a solid foundation for the year ahead. As the markets prepare for potential volatility in 2025, experts emphasise strategies like portfolio diversification, sectoral shifts toward defensives, and staying invested with a long-term perspective. 

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.