indian stock market The year 2024 has been full of ups and downs. Due to general elections and geo-political tension in the country, the stock market witnessed a huge decline several times. Due to this, small investors suffered huge losses. Now investors are eyeing 2025. We asked Sanjay Chawla, CIO (Equity), Baroda BNP Paribas Mutual Fund, where the bullishness lies in 2025? Where can investors make big money? He has given some themes for 2025. Let us know about them.
Sanjay Chawla said that as we step into 2025, we believe that these changes will be visible.
1. The new system in America is likely to affect global trade as well as the geo-political situation.
2. The Indian economy should gradually improve due to increase in both government spending and corporate spending.
3. Innovation based themes will be strong. We strongly believe that India’s journey from a developing economy to a developed economy has begun. The important factor that is going to be at the center of this journey is innovation.
At Baroda BNP Paribas Mutual Fund we have identified 4 specific themes of investment opportunities-
Growing size of financial sector: India has already taken the lead in adopting digital payments. Increasing access to digital financial solutions without any interruption or hassle will lead to equitable growth of all sections, higher productivity and better access to capital as well as investment opportunities.
Industry 5.0: We believe that the next few years will truly highlight the growth that has come in the manufacturing sector for India. The global move towards a China +1 strategy in supply chains and growing domestic demand in India will mean that Indian manufacturing will reach the global level. Not only this, but we also expect India to be at the forefront of adopting and implementing new technology trends as it is at the centre-stage in the software industry, where India has a lead of over 3 decades now. Has been found.
Retailization- Increasing participation of retail investors: Generation Z spending is expected to reach US$1.8 trillion by 2035. Technology will play a vital role in every aspect of consumption, everything from what they buy to how they buy it. We believe there will potentially be major changes in the space, which could lead to a re-distribution of market cap.
Energy Transition: This is a global theme and is set to change the energy landscape in India as well. The transition from traditional sources of fossil fuels (coal and crude oil) to renewable sources (solar, wind and electric vehicles) is already opening up significant investment opportunities across the value chain.
2025: These global factors will be monitored
Talking globally, all eyes are on the tariff decisions of the Trump administration. India is the least affected by the tariff war…nevertheless, the tariffs will increase inflationary pressure in the US. This would mean that interest rates would not go very low. This is also reflected in the US 10-year yield, which is higher than levels earlier this year, despite a 0.75 per cent cut in interest rates this year. The combination of higher tariffs and higher US rates will mean the US dollar will continue to trend higher. We will look for signs of downside in emerging market currencies. China’s move on the currency front will be important as the economy is already vulnerable to export shocks due to slowing domestic demand. Another hope is that geo-political conditions will return to normal around the world. Along with this, the strengthening of the dollar will mean that commodity prices, including crude oil prices, will remain under control. This is certainly good news from India’s point of view.
Growth will accelerate from the third quarter
Talking about India, there are some doubts on the growth story given the low GDP growth figures in the last two quarters. However, government spending was affected due to national elections in the first quarter and monsoon in the second quarter. We expect a gradual improvement in spending from Q3FY25 onwards and hence better GDP growth. We believe that 6-7 per cent real GDP growth and 4-5 per cent inflation, which translates into 10-12 per cent nominal GDP growth, is a better situation for India.
Finally, the overall valuations for the Indian market are in line with the 10-year average. Although valuations are high in some places, we are excited about the multiple opportunities in the market. Overall, we are going into 2025 with high hopes, where we believe that India will once again emerge as an economy and market that will be least impacted by global uncertainties and will in fact be the strongest. Will proceed from.
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