With a trading session left in 2024, benchmark indices Sensex and Nifty are likely to end the year with single-digit returns. Till date, Sensex has gained 8.92% and Nifty has risen 9.49% in 2024. The year 2024 saw Sensex hitting a record high of 85,978 and Nifty touching a record of 26,277 on September 27.
In the current session, Indian equity market was trading on a muted note. Sensex was up 51 pts at 78,750 and Nifty was up 5 pts to 23,818.
Business Today online sought analysts' views on the outlook and strategy to navigate the market next year. Here's a look at what they said.
Saurabh Jain, Managing Director & Head, Wealth Solutions at Standard Chartered Bank, India
"As we head into 2025, our base case is a recovery in India's growth and corporate earnings, supported by a pick-up in government spending and a recovery in consumption demand as the RBI commences its policy easing cycle. We believe the macro backdrop favours risk assets and raise Equities to Overweight in our Foundation allocations, funded by an Underweight Cash. Though, elevated valuations are likely to limit multiple expansion, we believe earnings growth would drive total returns, supporting the likely outperformance of equities to cash and bonds. Domestic equities are supported by other profitability measures like return-on-equity (ROE), which remains ahead of major peers. Further, foreign investor positioning in domestic equities remains close to a decadal low. Gold remains a strong core holding and a key portfolio hedge against escalating geopolitical tensions, rising inflation or growth slowdown. "
Shiv Chanani, Senior Fund Manager - Equity, Baroda BNP Paribas Mutual Fund
"Coming on the back of two strong year of returns in the market, we believe that a bottom-up approach strategy is more likely to be effective in the year 2025. Investors need to be mindful that the world is not more dynamic and volatile &they would need to be nimble in their asset allocation. All allocation should have margin of liquidity in terms of either valuation or high degree of sustainability of potential earnings in line with the asset allocation mentioned in the Scheme Information Document."
Narendra Solanki, Head Fundamental Research - Investment Services, Anand Rathi Shares and Stock Brokers
"Considering a broad based outlook of long term, investors should design their portfolio by keeping risk to reward ratio in the mind. These can be possible by diversifying their funds in quality stocks of large cap, midcap and small caps. One should rebalance or add additional funds in their portfolio whenever they see any opportunity or dips in any of those space."
Jathin Kaithavalappil, Assistant Vice President, Choice Broking
"High-quality stocks with strong fundamentals should be the focus of investors this time around, particularly in banking, consumer and technology. Adding something like defence and pharmaceuticals, railways selectively should be also kept in mind for the balance. Portfolio construction can ensure balance by having a growth and defensive dimension."
Mohit Batra, Founder, MarketsMojo
"India's 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."