The performance of the Indian stock market in 2024 has been notably positive, with significant gains across major indices. On the benchmark front, both Nifty and Sensex, edged higher for the ninth consecutive calendar year and have surged ~9% so far. This upward trend reflects a broader market rally, with both indices consistently reaching new highs, and the Nifty crossing multiple milestones, from 22,000 to 26,000, in a relatively short period.
However, in the second half of the year, the market faced challenges such as weak corporate earnings, FII outflows, elevated inflation, and sluggish GDP growth. Despite these headwinds, steady buying by DIIs and strong participation from retail investors has supported the markets.
As we move into 2025, several notable trends are expected to influence markets, both in India and globally. Shifts in U.S. trade policies, including higher tariffs, could alter international trade patterns and supply chains, prompting countries like India to reassess trade agreements and potentially introducing market uncertainty.
Additionally, the resolution of ongoing geopolitical conflicts could stabilize global markets and improve economic sentiment. Furthermore, a recovery in corporate earnings is anticipated as businesses rebound from a period of slower growth, supported by higher government capital expenditures and renewed private sector investments.
Moreover, as inflationary pressures ease, the demand environment could improve, boosting consumer spending and increasing purchasing power. Together, these factors are likely to create a dynamic environment, offering both opportunities and challenges for investors.
Meanwhile, investors are advised to focus on accumulating fundamentally strong stocks during market dips, particularly those with solid balance sheets and growth potential, to navigate fluctuations.
