Chandigarh:- The first six months of the year have been very volatile for investors. Due to the ongoing geopolitical turmoil and economic policies at the global level, the domestic markets have been badly affected. After the record level of January 29, the prices of gold and silver have fallen drastically, in which gold has become cheaper by about 20 percent and silver by 43 percent. Not only the bullion market, but also the stock market could not escape this pressure. During this time, the BSE index Sensex has registered a decline of 11 percent and the National Stock Exchange's Nifty has recorded a decline of 8.6 percent.
According to experts, two main reasons have emerged for this recession. First, the hawkish stance adopted by the new US Federal Reserve Chairman Kevin Warsh seems to have dampened investors' hopes of an early cut in interest rates, which has strengthened the dollar and affected gold demand. The second major reason is the tension arising from the US-Iran war, which has put brakes on the pace of global growth and rising inflation has weakened stock market sentiment.
Gold prices expected to rise by 12% in the next 6 months, smallcap and midcap stocks will give profits
Market experts believe that despite the current slowdown, the coming time may be good for investors. According to Ajay Kedia, director of Kedia Advisory, in the short term, gold may fall by 2 to 5 percent due to money flowing out of ETFs, but it may see a rise of 12% to 15% by the end of the year. On the other hand, G. Chokalingam says that in the next six months, smallcap and midcap stocks may outperform largecap stocks (Sensex-Nifty) as many smallcap stocks have come down significantly from their September 2024 highs and are now available at better valuations. According to Sudeep Shah of SBI Securities, Nifty is currently going through a period of consolidation and hence the 23,730 to 23,700 level will act as an important support. However, it may take another 1 to 2 quarters for foreign institutional investors to fully return to the Indian market as they are waiting for the rupee exchange rate to stabilize.