Do it yourself

In the past seven trading sessions, the benchmark Nifty 50 has managed to fully recoup the YTD2025 losses, soothing the ruffled feathers to a large extent. The broader markets have also regained some of the lost ground, though the midcap (-10% YTD2025) and small cap (-15% YTD2025) indices are still in the negative territory.

For the financial year 2024-2025, Nifty (+6.5%) has yielded a decent return, which is marginally lower than China (+12%), the US (+10%) and Europe (+9%), but much better than the other Asian peers like Indonesia (-11%), Japan (-6%) and South Korea (-5%). Broader markets in India are also positive FY25 (Midcap +8% and Smallcap +5%).

Now the question is “how does the market look from here?”. I shall deal with this question in some detail next week. However, to close this financial year, I must say this.

In my view, the collective wisdom of the market in India has appeared to have assimilated all the known events and anticipated developments regarding the economy and earnings, that could have sustainable impact on the stock prices. The market pendulum has tested both the extremes in the past seven months. A major surprise, positive or negative, or a black swan event, may only cause the market to breach these extremes in the next 6-8 months.

The most probable scenario for the next month is that the market swings get incrementally shorter in the next 9 months, as additional evidence of earnings recovery and improvement in the macroeconomic conditions emerges. We may also have more clarity on the global economic and geopolitical conditions in this period. In my assessment, for most of the time in the next 9 months, Nifty may oscillate between 22500-24500 (with occasional excursions outside this range) and find a sustainable pivot around 23500-24000 level.

A new market cycle might begin, once the market stabilizes around the equilibrium level and more credible assessments are available about the future earnings trajectory and macroeconomic growth and stability.