Saturday , November 23 2024

High valuation of shares in the new financial year will curb the market boom

Ahmedabad : Events like elections in India, US and other countries, interest rate action and persistent geopolitical tensions impact market sentiment. In view of this, most market experts believe that the returns from Indian markets in the new financial year can be around 10-15 percent.

In FY2024, Sensex and Nifty have given returns of 25% and 29% respectively. While mid-cap and small-cap indices gave returns of more than 60%. Between FY2020 and FY2024, Nifty and Sensex have given returns of 160% and 150% respectively.

Given the consistently high returns, experts advise caution in the market, especially because mid- and small-cap stocks are overvalued. Indeed, he believes FY2025 is likely to be the opposite of FY2024. There will be widespread instability in the market. Given this, investors would be wise to exercise caution for FY2025.

We are outperforming the historical performance of markets globally. It is noteworthy that we are now in the fifth year of the bull market. Typically, bull markets don't last more than 5 years, often a little less.

Investors considering this move could get returns of 10-15% in FY2025, although market experts believe high valuations could limit gains in the broader market. In the near future, the focus of investors will be on the elections to be held in India. There may remain some nervousness in the market till the election results come.

Yet the panic will be much less than usual as most surveys suggest a lopsided result. If any one party gets an overwhelming majority, investors will keenly watch the budget in July. The start of the financial year has been encouraging for investors with Sensex reaching all-time high of 74501 and Nifty 22619.