Experts bullish on 6 sectors for good returns amid stock market volatility
BSE Sensex was the eighth best-performing global index in 2023, but slipped to 13th rank in 2024. The analysis is based on 22 world equity benchmarks that cover the US, Europe, Latin America and Asia. The data is sourced from Reuters-Refinitiv.
The weak performance of corporate India in the September quarter, geopolitical factors, elevated valuations, strengthening of the US dollar index and substantial FPI outflows (in October and November) led to a jump in volatility in the fourth quarter of 2024. As the markets enter 2025, the volatility is unlikely to abate soon due to high US bond yields and a stronger USD index. These factors will keep the US markets attractive and prevent FPIs from sustained buying in emerging markets (EMs), including India.
Risk factors
Experts are anxious about India’s macroeconomic health due to uncertainty over tariff and pro-growth policies of the new US government. Such policies are likely to be inflationary and could impact India’s current account deficit (CAD), INR-USD exchange rate, and the rate cut cycle of the US Fed and RBI. While CAD is expected to widen, the rupee will depreciate further against the USD. On the other hand, rate cuts are expected to be shallow for both the US Fed and India.
A recent JM Financial macro outlook report highlights the fact that uncertainty around US tariff policies will shape global dynamics in 2025. Changes in the global supply chain, driven by Trump’s policies, are expected to affect exports more than imports. With India’s import-heavy trade and
