Performance Report: Year with Domestic Political Uncertainties and Global Headwinds
The Indian stock market in FY24-25 exhibited resilience amidst a mix of domestic and global challenges, delivering modest but positive returns for major indices. Despite facing headwinds such as foreign institutional investor (FII) outflows, geopolitical tensions, and domestic policy uncertainties, the market was buoyed by strong domestic retail participation, robust economic fundamentals, and sectoral growth. Key benchmark indices, including the BSE Sensex and NSE Nifty50, ended the financial year with gains, though the performance was more subdued compared to previous years.
The Indian stock market in FY24-25 delivered a solid, if unspectacular, performance, with benchmark indices gaining around 5-5.5%. While foreign investor selling and global uncertainties posed challenges, domestic retail participation and strong economic fundamentals provided a buffer. The market’s resilience, coupled with sectoral diversification, suggests a stable foundation for future growth, though investors should remain vigilant about global risks and valuation concerns, particularly in mid- and small-cap segments.
Performance Summary : Nifty Long-Short, Model 1 Vs. Nifty 50
Nifty Long-short has outperformed the Nifty Index by wide margin for the last financial year and reported 147% return for the year compared to 5.3% for the Index.
As designed this strategy was able to capture both the up move and down move in the Index pretty well and provided the much needed cushion to the long only portfolio.
Nifty Long-Short is Index Future based strategy runs on 3x leverage started on 12th August 2020. To know more about it click here.
To check the historical performance for Nifty Long-Short click here.
Model 1 has underperformed the Nifty Index and gave -2.8% compared to 5.3% for the Index for the last financial year. Model 1 was working exceptionally well but it faced the headwinds since Sept 2024.
Model 1 is 10 stocks portfolio selected based on the Momentum factor started on 13th July 2020. To know more about it click here.
Model 3 has outperformed the Midcap 100 Index gave 10.3% return compared to 7.5% of the Index.
Model 3 is a 10 stocks portfolio selected out of Midcap 100 Index based on the Momentum factor started on 13th July 2021. To know more about it click here.
Outlook for FY25-26
Looking ahead, analysts are cautiously optimistic about FY25-26. Key expectations include:
- Continued robust GDP growth (6.5%-7%), driven by infrastructure and manufacturing.
- Potential RBI rate cuts in 2025, which could attract more FII inflows.
- Sectors like green energy, pharma, healthcare, and capital goods are expected to outperform, supported by government policies and global demand shifts.
- However, challenges such as global trade tensions, US tariff policies, and domestic inflation could introduce volatility.
