Expert view: Sonam Srivastava, the founder of Wright Research, believes the Nifty 50 could see a modest recovery towards the end of the year. She believes a proper recovery will come when FIIs (foreign institutional investors) return to India, which looks a bit far off. A realistic year-end target for the Nifty 50 would be in the range of 24,500 to 25,000. In an interview with Mint, Srivastava also shared her views on key triggers for the domestic market, as well as strategies for mid-and small-cap segments and sectors she is positive about.
Market sentiment is currently influenced by several factors: global economic uncertainties, including geopolitical tensions and concerns over economic slowdowns and uncertainty of Donald Trump’s policies; monetary policies, particularly the US Federal Reserve's stance on interest rates; corporate earnings reports, which have been quite a disappointment this quarter and have lowered expectations for the next few quarters; and persistent inflationary pressures affecting consumer spending and corporate profit margins. These elements collectively contribute to market volatility and investor caution.
Considering current economic indicators and market conditions, a modest recovery is anticipated towards the end of the year.
However, the extent of this recovery will depend on factors such as inflation control, corporate earnings performance, and geopolitical developments.
A proper recovery will come when FIIs (foreign institutional investors) return to India, which looks a bit far off.
A realistic year-end target for the Nifty 50 would be in the range of 24,500 to 25,000.
The domestic market in 2025 will likely be influenced by (1) monetary policy adjustments, including potential interest rate cuts by the Reserve Bank of India, (2) infrastructure development through increased government capital expenditure, (3) sustained corporate earnings growth across sectors, (4) foreign investment inflows driven by stable political and economic conditions, and (5) technological advancements, particularly in the IT and digital services sectors.
We are seeing a tilt towards quality in our strategies, which shifts focus towards slightly larger companies.
But we are still invested in select companies in the mid-and small-cap segments—especially those in defensive sectors and with high value.
Investors should adopt a selective approach to mid-and small-cap segments, focusing on companies with strong fundamentals, robust growth prospects, and competent management.
Diversification across sectors and thorough due diligence can help mitigate risks associated with these segments.
Recent revisions in India's growth projections suggest caution. Factors such as inflation, global economic conditions, and domestic policy decisions require close monitoring.
While the long-term growth story remains intact, short-term challenges warrant a prudent investment approach.
The political climate in the US, including potential policy changes under the Trump administration, can influence global trade dynamics and investor sentiment.
However, India's diversified economy and strong domestic consumption may buffer some external shocks.
There is still a lot of uncertainty around the policies, and continuous monitoring of international policies is advisable.
The IT sector continues to show resilience, and the guidance from the earning season is also quite positive, hinting at growth in global demand for technology services.
Investors should consider companies with a strong global presence, diversified service offerings, and consistent financial performance, such as Infosys, Tata Consultancy Services (TCS), and HCL Technologies.
Sectors with a positive outlook include pharmaceuticals, due to ongoing healthcare needs and export opportunities; renewable energy, driven by government focus on sustainable energy sources; consumer durables, supported by rising disposable incomes and urbanization; financial services, benefiting from expansion in banking and financial inclusion initiatives; and infrastructure, with government spending on projects expected to benefit related industries.
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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
