Yes, the Indian market has shown resilience despite multiple global and domestic disruptions over the past five years. Events like COVID-19, geopolitical conflicts (Russia-Ukraine, Israel-Gaza, etc.), elections, and trade disputes have triggered sharp corrections. However, the market has typically stabilized within 3-5 months, followed by a strong rebound.
1. COVID-19 Pandemic: December 2019: The first cases of COVID-19 were reported in Wuhan, China. March 11, 2020: The World Health Organization declared COVID-19 a global pandemic.
2. Russia-Ukraine Conflict : February 24, 2022: Russia initiated a full-scale invasion of Ukraine, leading to widespread geopolitical tensions and economic sanctions.
3. Israel-Gaza Conflict:October 2023: A significant escalation occurred between Israel and Hamas in the Gaza Strip, leading to heightened tensions in the Middle East.
4. Indian General Elections: April 19 – June 1, 2024: India conducted its general elections over seven phases. June 4, 2024: The Election Commission announced the results, confirming Prime Minister Narendra Modi’s third term in office.
5. On February 1, 2025, Finance Minister Nirmala Sitharaman presented India’s Union Budget for the fiscal year 2025-26 :- focusing on stimulating economic growth, supporting the middle class, and enhancing various sectors.
Key Highlights :- Tax Reforms — Increased Income Tax Exemption: Under the new tax regime, individuals earning up to ₹12 lakh annually are exempt from income tax, up from the previous ₹7 lakh threshold. This move aims to boost middle-class consumption and savings. Revised Tax Slabs: For incomes above ₹12 lakh, the tax rates have been adjusted to reduce the burden on taxpayers.
6. Trade Disputes: February 27, 2025: U.S. President Donald Trump announced an additional 10% tariff on Chinese imports, effective March 4, 2025, escalating trade tensions. February 28, 2025: Indian stock markets declined by over 1% due to concerns about a potential global trade war and a slowing U.S. economy
Right now, with ongoing trade disputes in US, there may be volatility, but history suggests that Indian markets will stabilize and continue their upward trajectory.
the impact of global political events on the Indian stock market. The second term of President Trump, combined with trade disputes and global economic uncertainty, has contributed to the correction in equity markets.
- Indian Markets Down 16% in 5 Months: Continuous negative expiry of Nifty indicates weak sentiment, likely due to global economic concerns, FII outflows, and domestic policy uncertainty.
- Low Trading Volumes: This suggests a lack of confidence among retail and institutional investors, possibly due to risk aversion and global volatility.
- March 2025 Recovery Expected: Historically, the market tends to stabilize and recover after prolonged corrections, and March could see a bounce-back.
What Could Drive the Market Upwards?
1. Budget Implementation: Government policies and capital expenditure from the 2025 budget could fuel recovery.
2. Earnings Season: If Q4 FY25 corporate earnings show resilience, investor sentiment may improve.
3. Global Cues: Any positive developments in U.S.-China trade relations or easing geopolitical tensions could bring FIIs back.
4. RBI’s Monetary Policy: Liquidity measures by the Reserve Bank of India could support markets.
March 2025 could mark the beginning of an upward trend, with heavyweight stocks leading the way.
- Heavyweight Stocks to Lead Recovery:
- Reliance Industries (RIL): Strong in energy, telecom, and retail—likely to benefit from stabilization in crude prices and domestic demand.
- HDFC Bank: Banking sector plays a crucial role in reviving the economy, and HDFC Bank’s fundamentals remain strong.
- Hindustan Unilever (HUL): FMCG stocks perform well during economic slowdowns and provide stability in market recoveries.
- ITC: A diversified business model with a strong presence in FMCG, cigarettes, and hotels makes ITC a defensive bet.
- State Bank of India (SBI): The largest public sector bank, benefiting from economic revival and government spending initiatives.
Disclosure
This communication is for informational purposes only and does not constitute an offer, solicitation, or recommendation to buy or sell any securities, financial instruments, or investment products. The information provided herein is based on publicly available data, historical trends, and market analysis, which are subject to change without notice.