Market bullish at the beginning of January series, experts’ opinion on investment strategy for 2025

A positive trend was seen in the stock market on the first day of the January series. In the week ending December 27, Nifty gained 0.96% and Sensex gained 0.84%. This week proved to be good for investors. Dhawal Gada, Fund Manager, DSP Mutual Fund, shares his outlook on the market performance in 2024 and prospects for 2025.

2024: Market performance and sector rotation

According to Dhaval Gada, the market journey in 2024 was full of ups and downs.

• Annualized Returns: Nifty gave an annualized return of 13%.
• Sector Rotation:
  • First 6 months: Cyclical and industrial sectors picked up, leading to good wealth creation.
  • Last 6 months: Amidst ups and downs, there was growth in utilities, telecom sector and good returns in mid and small caps.

2025: Market Outlook

Volatility: There may be some volatility in the market in 2025.

• Earning Growth:
  Earnings growth of 9% is expected in the new year.
• GDP growth:
  India’s GDP growth is likely to be 7% in 2025.
• risk:
  • Geopolitical tensions.
  • Weakness of the domestic economy.
  • Slow economic activity in September quarter.

Investment Strategy:

• Maintain a balance of largecap and smallcap in the portfolio.
• Focus on diversification.

Sector performance

FMCG Sector:

• Challenges:
  Lack of demand and business model problems.
• Investment Approach:
  At present there is no earning stability in this sector.

Pharma Sector:

• American pharmaceutical companies:
  Good recovery and stable domestic business.
• Valuation:
  Neither too bullish, nor too bearish.
• Investment Strategy:
  Focus on active management and fair valuation.

Insurance Sector:

• past performance:
  The business model of life insurance remained strong.
• Long Term Outlook:
  7-8% CAGR returns in 3 years.
• Investment Strategy:
  The insurance sector offers better opportunities for the long term.

DSP Banking and Finance Services Fund Strategy

• Objective of the Fund:
  Generating better returns by investing in banks and NBFCs.
• Focus Area:
  • Multiple Themes.
  • Covers more than 20% of the market.
• Advice:
  Focus on investing for the long term.

Outlook for Quick Commerce

• Change in consumption pattern:
  A change has been seen in consumer preferences.
• Growth:
  Strong but likely limited earnings growth.
• Volatility:
  Ups and downs are expected in this area.

IPO market trends in 2025

• Retail Partnership:
  The participation of retail investors in the IPO market in India has brought structural changes.
• Growth:
  Likely moderate growth in 2023 and 2024.

investment tips

• Diversify your portfolio.
• Maintain a balanced mix of largecaps and smallcaps.
• Focus on insurance and banking sectors for long term investments.
• Maintain patience to face volatility.