Market Strategy: Overweight on banks, IT, selective in small, midcaps; Zomato, ICICI Bank among top picks: Motilal Oswal

The Indian stock market is set to conclude calendar year 2024 on a strong footing, with benchmark indices Sensex and Nifty 50 delivering over 8% year-to-date returns, marking their ninth consecutive year of gains. According to a note by Motilal Oswal Wealth Management, several factors contributed to the heavy FII outflows, including moderating corporate earnings, elevated valuations in mid-cap and small-cap stocks, and a strengthening dollar index following Donald Trump’s victory in the US Presidential Elections. Given the fragile global economic environment and mixed macroeconomic conditions in India, markets are expected to remain in a consolidation phase in the near term, as per Motilal Oswal Wealth Management. Stock Market Outlook for 2025 After a subdued earnings performance in the first half of FY25, Motilal Oswal Wealth Management expects earnings to recover in H2, driven by increased rural spending, a buoyant wedding season, and pickup in government spending. The Capital Markets theme remains constructive, driven by the rise in retail participation, surge in demat accounts, and the ongoing financialization and digitization of savings, Motilal Oswal Wealth Management said.