After maintaining an earning spree for nine years and topping it with 9% earnings in 2024, the stock markets look robust for 2025. While the Bombay Stock Exchange surged 8.7%, the National Stock Exchange soared 9% last year.

The Sensex touched an all-time high, breaching the mark of 85,500 in 2024. Sectors like real estate, consumer durables, and IT were among the best-performing stocks.

The Sensex and the Nifty 50 were bullish when the market opened for the first time in the new year, and the experts believe the indices of these exchanges, the Sensex and the Nifty may soar to new heights considering many positive factors, that may push them further north.

Will RBI Cut Interest Rates?

Taking the cue from the US Federal Reserve, the Reserve Bank of India will most likely cut interest rates when the Monetary Policy Committee meets in February.

It is most likely to bring the repo rate to 6% after maintaining the same at 6.5% since February 2023.

The repo rate is the interest rate at which the RBI lends money to commercial banks.

All Eyes On Budget 2025-26

Much depends on the budget 2025-26 and Finance Minister Nirmala Sitharaman is expected to lower the fiscal deficit to 4.9% of the GDP and limit the gross borrowing to Rs 14 lakh crore.

All eyes are set on the budget also because Nirmala Sitharaman is expected to rationalize the tariff to encourage imports that may boost the manufacturing sector as well.

Will the Finance Minister Cut Taxes?

Much also depends on if the Finance Minister cuts Income Tax and direct taxes to put some extra money into the pockets of the middle class who can invest it in the stock market.

However, the experts believe, there is less possibility of doing so considering the fact she has to garner more revenue and slash the fiscal deficit.

Will NSE 50 Cross 26,000-Mark?

Experts believe, if the budget turns positive and addresses at least some of the concerns of the industry, the stock market may earn as much as 14%, in this case, the NSE 50 may gain 1375, touching 26,100. It will be the record height for the NSE index.

There are silver linings as well. The government could spend 45% of the budget estimates for the year 2024-25 and the rest of the money is still left with it.

Increased Government Spendings

Experts believe that the government will have to spend Rs 11.1 trillion from March to December 2025, meaning more than Rs 1 trillion every month. It may be spent on infrastructure projects, kick-starting development, that may also help create jobs.

Will Donald Trump Impose Fresh Tariffs?

After Donald Trump takes charge on January 20, he is most likely to impose fresh punitive tariffs on imports, particularly from China, India, Canada and Mexico under his ‘America First’ concept. If it happens, Indian exports will be hit hard, hitting the stock markets.

Market analysts believe the stock market should not be expected to perform better than what it did in 2024, considering many factors.

Consumption

One of the main areas of concern is consumption, which is not going to soar considering the increasing inflation and sluggish GDP growth rate.

Inflation

Inflation is another area of concern, as it is pegged at 5.7% for Q3 and 4% for Q4 of the Financial Year 2024-25. However, the concerns may go up with the RBI increasing the consumer Price Inflation outlook for FY25 from 4.5% to 4.8%.

Corporate earnings are most likely to go up for Q3 after a dismal performance in Q2. If it happens, the Sensex and the Nifty 50 are most likely to soar.

Experts believe the stock markets will be on a rollercoaster ride in the year 2025. It is most likely to end with earnings, however, it is too early to predict the quantum of the earnings.