Investment Outlook: Confidence Boosted by Peace in West Asia and India's Strong Economy; New Momentum Expected in the Second Half of FY25
While numerous uncertainties prevailed globally in the first half of 2025, the situation is gradually normalizing. Tensions have eased in regions like West Asia, particularly with improvements in the relations between Iran and Israel. This has also impacted oil prices. The decline in Brent crude prices has brought significant relief to countries like India, where controlling inflation is crucial.
Commodity Stability Restores Investor Confidence
Prices of gold, silver, and other metals have also softened. This collectively is creating a positive environment for the market. Investor confidence is rebuilding, and foreign investors have begun to turn towards the Indian market.
The Country's Economy is Strengthening
India's domestic economic situation is consistently strengthening. Demand in the market remains robust, the financial condition of companies has improved, and the pace of lending by banks has also increased. These factors are collectively contributing to the strengthening of the stock market.
Banks and Finance Companies Remain Top Choices
The banking and financial sectors are considered the best for investment. Private banks like ICICI Bank, HDFC Bank, and Federal Bank are performing well. Meanwhile, SBI has emerged as the best option in the public sector.
AU Small Finance Bank's position remains b due to digital banking. In housing loan companies, PNB Housing, Home First, and L&T Finance are being preferred.
Insurance and Broking Sectors Also Shine
Speaking of insurance companies, companies like Niva Bupa are growing rapidly. Angel One is at the top among broking companies, while Nuvama's performance in the wealth management sector has been good.
Focus Shifts Towards Industrials and Machinery Sectors
Following banking, the next preferred sector for investment is said to be industrials and capital goods. Due to the continuous growth of infrastructure projects and the strength of the manufacturing sector in the country, good investment opportunities are emerging in these sectors.
Investor interest in engineering and machinery manufacturing companies has increased. The valuation of these companies is still quite affordable, which is expected to lead to a rise in their shares.
New Confidence Shown in IT Companies
The IT sector has recently seen a decline, but now there are signs of improvement. Especially those companies working in fields like artificial intelligence and automation have seen increased investor interest.
Many mid-cap IT companies have good clients, and their order books are also b. In such a situation, good profits are expected from these companies in the coming months.
US Policy Supports the Market
The US Federal Reserve Bank has indicated two interest rate cuts in 2025. This could increase the flow of liquidity in markets around the world. In addition, there is also talk of changes in the SLR, which will give banks more funds and enable them to give out more loans.
This could accelerate the pace of foreign investment in emerging markets, and countries like India can benefit from this.
IPO Market Momentum Remains Strong
The IPO market in India remains consistently active. Large and b companies are entering the stock market. However, investors have become more cautious than before. They are only trusting companies with clear business models, good management, and the potential for future earnings.
Now investors are deeply understanding each proposal and investing with careful consideration.
The Investment Trend in 2025 Will Be Different
According to this report by Motilal Oswal, the market trend in the second half of 2025 will be largely sector-based. Instead of the entire market, rapid growth may be seen in specific sectors and stocks. Amidst this change, the importance of b companies and shares with good fundamentals has increased even more.
