From the outcome of the general elections and then Union Budget to tepid corporate earnings in the September 2024 quarter (Q2-FY25), sticky inflation and Reserve Bank of India's stance on interest rates, extreme weather conditions, Indian stock markets have braved it all in calendar year 2024.

Gold price outlook 2025: Gold prices that have climbed over 30 per cent so far in 2024 to Rs 7,300 per gram in the Indian markets (up 28 per cent in dollar terms till November-end), are set for their best calendar year performance in 10 years, suggests a recent report by World Gold Council (WGC). However, this stellar run, analysts believe, may not carry through till the end of 2025 in the backdrop of economic and geopolitical headwinds.

As regards mid-caps and small-caps, analysts suggest investors buy only those stocks of those companies where there is earnings visibility for at least a few quarters and where the valuations have become reasonable.

Analysts are warning of growing risks to the market's sustained momentum, and even to the possibility of consolidation at current levels. Domestically, markets are grappling with several challenges, including a slowing economy, as indicated by the latest GDP data for the July-September (Q2) quarter of 2024-25 (FY25), sticky inflation, fluctuations in the rupee, waning consumption, and high interest rates.

The Indian market remains an attractive place to do business for the nation's entrepreneurs, with 75 per cent of them operating domestically.

The outcome of Maharashtra state elections is unlikely to move markets much, said analysts. The markets, they believe, have bigger developments to worry about in the short-to-medium term.

The sharp pullback in mid and smallcap stocks signals a cooling-off period in segments that previously attracted considerable investor interest.

Retail investors have become a force to reckon with in the last 10 years with their ownership of Indian equities rising 800 basis points, or 8 per cent, to 23.4 per cent during this period, suggests a recent note from Morgan Stanley. This number, Morgan Stanley said, is set to rise in the next few years as Indian households are still underinvested in equities. India's demographics, policy framework, investor education and modest positive real rates, it said, will fuel the 'equity cult' in India.

'Investors looking at the next 6-12 months can be certain that the Fed will maintain its easing cycle, and we expect the overall environment to be conducive for fixed income investments for portfolio diversification.'

After a strong run in the midcap and smallcap indices, which surged 46 per cent and 43 per cent, respectively, on the National Stock Exchange (NSE) during Samvat 2080, analysts suggest that the rally in these segments may pause to catch its breath in Samvat 2081.

The rally in Indian mid-and smallcap indices thus far in calendar year 2024 (CY24) has been the best in class across the world, eclipsing the global FTSE benchmarks, and also out running peers from other leading world stock markets. This is despite the correction in the mid-and smallcap segments back home seen in the last few days, triggered by valuation concerns, geopolitical developments amid nervousness ahead of the July - September 2024 (Q2-FY25) corporate results season.

Crude oil prices could dip to the low $60s by the end of 2025 after rising to $80 a barrel in the last quarter (October-December) of 2024 - up nearly 10 per cent from current levels, suggest analysts at JP Morgan. The main players in West Asia, including Saudi Arabia and the UAE, have a strong incentive to keep the conflict contained, according to the JP Morgan report.

'The biggest near-term risk to Indian equities is the outflow of investments to China as tactical trades by foreign investors.'

'Invest only in stocks of those companies that deliver on earnings and there is earnings visibility too for the next few quarters.'

The recent stimulus measures announced by China have seen most analysts sit up and take notice.

'More investors now view the stock market as a valuable opportunity, though many still seek quick gains, leading to a rise in futures and options trading.'

The narrative on China is changing post the recent stimulus measures, and it will be hard for global investors to ignore the Chinese markets.

'Even now, investors are not bothered about the war but are more concerned whether it will remain localised or not.' 'In case things are contained, markets can stage a bounce back in the next few days.'

Global head of equity strategy at Jefferies, Christopher Wood, has cut his exposure to Indian equities by one percentage point in the Asia-Pacific ex-Japan relative-return portfolio, and Australia and Malaysia by half a percentage point each in favour of China, which has seen a hike in exposure by two percentage points. The rally in China has been fast-forwarded by the approach of a seven-day holiday with the CSI 300 Index up 8.5 per cent on Monday, and 25.1 per cent in five trading days, he said.

'If you look at where inflation (headline and core) is today in India and where the rates are, there's clearly room to cut rates.'