The Nifty 50 continues its correction, as Bank of America (BofA) predicts single-digit returns for 2025, citing multiple headwinds.

1. Nifty 50: Sharp Correction Since September 2024

Market Performance

• Since peaking in September 2024, the Nifty 50 has seen a broad-based decline.
• State-Owned Enterprises, low-float stocks, and mid/small caps have fallen 13% to 34%.

BofA’s Nifty 50 Outlook

• Single-digit returns in 2025 with high volatility, dubbing it “bond returns with equity risks.”
• Mid and small caps expected to underperform, facing negative returns due to valuation contractions.

2. Key Risks Keeping Nifty Under Pressure

Corporate Earnings Downgrades

• Nifty EPS growth projected at 12% for FY26, below the 15% consensus estimate.
• Slower capex growth and commodity price risks are major headwinds.

Policy Uncertainty & Global Risks

• US trade and fiscal policies could impact India’s economy.

3. Market Strategy: What Should Investors Do?

Stay cautious on mid & small caps. Track corporate earnings, FII & DII flows, and Fed policy trends closely.

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Final Thoughts

BofA expects single-digit Nifty 50 returns in 2025 due to high volatility. Watch earnings, capex growth, and global risks carefully.

Investors should adopt a selective approach and monitor key macroeconomic trends closely!