Outlook Business Desk
The Indian stock market experienced an 11 per cent correction from its all-time high over the last two months. The correction was driven by factors such as earnings moderation, high valuations in mid-caps and small-caps, and a stronger dollar index following Donald Trump’s US election victory
Following the BJP's victories in Maharashtra and Haryana, market optimism has been revived. There are expectations for increased government spending, favorable policy changes, and quicker completion of infrastructure projects. The RBI's 50bps CRR cut is anticipated to enhance liquidity in the system.
The firm has positive view on IT sector, on account of recovery in the global tech industry and growing demand for AI, automation, and cloud services. The Healthcare & BFSI sectors are also expected to perform well. Industrials & Real Estate sector also expects growth fueled by government initiatives in manufacturing and infrastructure and so do Capital Markets, EMS (Electronic Manufacturing Services), Digital E-commerce, and Hotels
The metals sector is underperforming and is expected to remain underweight. The Energy & Automobiles sectors are facing challenges and expected to remain underweight
The BFSI sector is well-positioned to benefit from anticipated repo rate cuts and improving profitability. The outlook for capital markets remains positive as well, driven by rising retail participation, an increase in demat accounts, and the ongoing financialization and digitization of savings
After two years of reduced spending, the US tech sector is expected to recover under President Trump's regime, which will benefit the Indian IT sector, while regarding the consumer discretionary, companies targeting the shift from unorganized to organized retail are set to benefit from changes in consumer purchasing behavior
The year may experience market consolidation in the first half, followed by recovery in the second half, driven by global and domestic factors such as rate cuts from the RBI and the US Federal Reserve, changes in trade policies under Donald Trump and key signals from the Union Budget
After a slow start in the first half, earnings are projected to rebound in H2 FY25, fueled by rural spending, the wedding season, and government expenditure. Furthermore, despite short-term fluctuations, Motilal Oswal maintains a positive outlook on Indian corporate growth, forecasting a 16 per cent CAGR in earnings from FY25 to FY27.E