India's Stock Market Resilience Amidst Global Volatility

An Anand Rathi report indicates a positive long-term outlook for India's stock market despite increased short-term volatility. Influences include geopolitical tensions, fluctuating oil prices, and FII adjustments. Promising sectors for investment include discretionary consumption, IT, and large banks, while seasonal factors impact various industries differently.

India's stock market outlook remains promising in the long term, although short-term volatility has increased due to geopolitical tensions, fluctuating crude oil prices, and adjustments by Foreign Institutional Investors (FIIs) in response to China's recent economic stimulus, according to a report by Anand Rathi.

Despite the global risk from the Israel-Iran conflict, crude oil prices are expected to remain stable below USD 88-90 owing to weak international demand. Strong domestic investments uphold market confidence, and although high-frequency data points to a sluggish second quarter, the upcoming festive and wedding seasons, favorable monsoon, and promising Rabi crop forecasts are likely to bolster demand in the latter half of FY25. This is further supported by increased government expenditures.

The second quarter may present mixed outcomes, impacted by disruptions from heavy rainfall affecting sectors such as agrochemicals and commercial vehicle sales. Infrastructure projects and cement companies face potential delays due to forthcoming elections, unpredictable weather, and slow budget allocation. Nonetheless, sectors like hospitals, alcoholic beverages, and jewelry, the latter benefiting from customs duty reductions, are poised for a strong performance.

(With inputs from agencies.)