Japan PPI inflation slips to 11-mth low in July
Investing.com -- India’s benchmark Nifty index is likely to end 2025 near 25000, but could swing as much as 11% lower or even 4% higher as investors react to shifting trade, policy and global macro conditions.
Bank of America warns that long-term investors should scale back return expectations to about 2.4% from now until December 2025, despite small gains so far this year.
For those willing to move between sectors and trade the ups and downs, opportunities could be larger, said BofA analysts.
One key risk is U.S. tariffs. BofA expects a 15% levy on Indian goods to be the base case, but says markets could come under pressure if the rate remains at 50% .
U.S. tariffs already in place have pushed up American import costs, which could lift inflation and slow growth, potentially limiting the Federal Reserve’s ability to cut interest rates.
Other factors that could fuel volatility include slower-than-expected corporate earnings growth, rising state subsidies ahead of elections that could squeeze capital spending, and muted foreign investor inflows.
Foreign funds have pulled $13 billion from Indian markets this year, and domestic inflows have eased from last year’s peak.
Tough some sectors could benefit like the IT industry which was upgraded to Overweight after a sharp underperformance this year, while utilities were moved to Neutral from Underweight.
Large banks, hospital operators and telecom companies are also seen as relatively insulated from tariff risks.
Possible policy moves like asset sales, higher central bank dividends and capital spending ramp up could help soften the blow from tariffs and slower growth, BofA see risks tilted to the downside in the months ahead.