Indian Stock Market 2025: Balancing challenges with strong growth prospects
Live MintIn 2024, the Indian stock market delivered decent returns to investors, with the BSE Sensex rising by 8.17% and the National Stock Exchange Nifty50 climbing 8.8%. This was despite numerous challenges throughout the year, including heavy selling by foreign institutional investors, weak corporate results in the second quarter, unfavourable weather conditions, geopolitical tensions between Iran and Israel, as well as Russia and Ukraine, delayed interest rate cuts amid persistent inflation, and the unexpected Lok Sabha 2024 elections results. This outlook assumes the continuation of India’s gains in macroeconomic stability through fiscal consolidation, increased private investment, high real GDP growth and relatively lower real interest rates. Given the Fed's rate cuts and potential policy shifts under President Trump, including tariffs on certain foreign countries potentially leading to higher US inflation, US funds might find investments in these countries riskier. Several factors will shape the market trajectory in 2025: Federal Reserve Policy: Interest rate decisions will remain critical, influenced by economic indicators like inflation and employment rates.