Stock Markets to Stay Rangebound

Mumbai: Equity market is likely to remain the largely range-bound this year given expensive valuation higher than historical averages, according to market outlook shared by a domestic brokerage firm.

The Sensex and Nifty-50 indices have gained 1.14 per cent and 2.10 per cent year to date in 2024 after gaining 18.74 per cent and 20.03 per cent in 2023.

The market is also unlikely to see a sharp correction with domestic economy doing well.

“The downside is protected by India’s strong medium term growth prospects which should keep valuations elevated, and a likely lower interest rate environment in the second half of FY 2025. The key downside risks are a sharper-than-expected global slowdown. Key upside risks can emanate from a sharper-than-expected US Fed rate cut cycle, strong economic reforms after the elections, and a quicker-than-expected private capex upcycle,” said Pratik Gupta, chief executive officer and co-head, Kotak Institutional Equities.

“We expect the market to remain largely range-bound this year. We believe market is expensive trading at 20 times March 2025 price to earnings ratio, which is higher than most other emerging markets.” Gupta said.