There is very little hope that there will be a lot of enthusiasm in the stock market in the new year. But it is important for you to know what things will affect the stock market during this period. Before knowing these things, do tell by commenting whether you expect a rise in the market this year?
According to Nilesh Shah, MD of Kotak Asset Management Company, among the three things that are going to impact the stock market this year, the first is geopolitical tension. Apart from this, the fate of the stock market is going to be decided by the decisions of the new US President Donald Trump and India-China relations.
Nilesh Shah said that if we talk about big economy, India will remain the highest growing economy. But for this he has also suggested some reforms. Among these, there is a great need for Inspector Raj, Land Reforms, Labor Reforms, Farm Reforms and Judicial Reforms.
These 6 sectors will run in 2025
Nilesh Shah says that without these reforms it will be difficult for India to achieve double digit growth. India’s GDP growth declined to 5.4 percent in the second quarter of this fiscal year. The biggest reason for this is sluggish consumption.
Economists say that due to increasing inflation, especially food inflation, people are left with less money to spend. Even people are able to spend less on essential things.
Will banks cut interest rates to increase consumption? Nilesh Shah has a different opinion on this. Shah believes that RBI is in no mood to cut rates at present. He believes that the central bank can reduce interest rates in the second half of the year 2025. However, RBI will not reduce the interest rate much. In the current environment, he advised to invest in gold for the medium term. Gold has given good returns to investors in 2024.
Now let us know in which sectors it would be better to invest money in 2025. According to Shah, private banks, IT, pharma, telecom, consumer staples and cement sectors are attractive for investors.
The credit culture of private banks is good and they have not given much loans to micro finance. Even in case of unsecured loans their balance sheet is fine. IT companies are using AI and ML. With their help they are offering fast solutions to the clients. The valuations of pharma companies seem right. Telecom companies will get the benefit of revision in tariff. Consolidation may be seen in the cement sector.