Indian stock market set to hit record highs in festive season: Experts

The Indian stock market is poised to hit new record highs in the second half of 2025, especially during the festive season, backed by strong macroeconomic fundamentals and a revival in consumption, according to Ankit Patel, co-founder of Arunasset Investment Services.

Patel emphasized the importance of disciplined investing amid ongoing global uncertainties. He identified the pharmaceutical sector as a compelling contra bet, given its undervaluation and long-term potential.

H1CY25: A Mixed Bag with a Turnaround

The first half of 2025 began on a slower note due to deferred government spending linked to general elections. However, a significant policy shift by the Reserve Bank of India in February—marked by interest rate cuts, liquidity injections, and eased banking regulations—reversed the sentiment.

This accommodative stance helped lift the economy, with Q4 FY25 GDP growth clocking in at an impressive 7.4%, showcasing resilience. RBI’s massive dividend payout of ₹2.69 lakh crore further improved the fiscal landscape.

Outlook for H2CY25

With inflation down to 2.82% and forex reserves remaining strong, India’s macroeconomic conditions continue to support equity markets. Moreover, foreign institutional investors (FIIs) have turned bullish, pouring in over ₹23,000 crore over the past four months.

Patel expects consumption-led growth and sectoral momentum to fuel a festive rally, likely pushing benchmark indices like the Nifty 50 past their previous peaks.

Sectoral Insights

While IT and banking remain core, Patel highlights pharma as a value pick amid cyclic underperformance. “It's a classic contra bet with structural tailwinds,” he noted, advising investors to align their strategies with personal goals and risk appetites.

As the markets gear up for Q1FY26 earnings, investors should stay focused, avoiding noise and short-term volatility, he added.