Macro and
Equity Market
Outlook
Equity Market
Outlook
GLOBAL MACRO & MARKETS
India’s NSE NIFTY index ended the month of June 2025 in green
(+3.1%). Among major global indices, the S&P500 (+4.6%), the
Morgan Stanley Capital International (MSCI) World (+4.3%), the
Japanese NIKKEI (+6.6%) ended the month of June 2025 with
positive returns while the Euro 50 (-0.98%) ended the month of
June 2025 in the red. Performance was positive among Emerging
Market (EM) indices as well, with the Morgan Stanley Capital
International Emerging Markets (MSCI EM), Hang Seng (Hong Kong),
BOVESPA Brazil (BVSP) recording sequential returns of (+5.7%),
(+3.4%), and (+1.3%) respectively.
The London Metals Exchange (LME) Metals Index rose (+4.8%) in
June 2025, as global trade tensions remained heightened. West
Texas Intermediate (WTI) and Brent Crude rose MoM, by (+7.1%) and
(+5.8%), respectively, as markets remained cautious given tariff
fears and geopolitical tensions in the Middle East.
The Dollar index declined (-2.5%), through June 2025, with the US
Dollar (USD) appreciating vis-à-vis Emerging Market (EM)
currencies (+1.7%) and appreciation against the Indian Rupee (INR)
on the spot market (+0.2%). India 10Y G-Sec yields rose by 3.6 bps,
while US 10Y G-Sec yields fell by 17.2 bps, and the German Bund yield
rose by 10.7 bps, with rates settling at 6.32%, 4.28% and 2.60%,
respectively.
Domestic Macro & Markets
The BSE SENSEX (+2.6%) rose in June 2025, in line with the NSE NIFTY
Index. The BSE Mid-cap index and the BSE Small-Cap index
outperformed the BSE SENSEX, rising by (+3.8%), and (+4.3%) over
the month of June 2025, respectively. Sector-wise, Teck, Healthcare
and Realty were the top outperformers over the month of June
2025, clocking (+4.7%), (+3.9%), and (+3.8%), respectively. Except
FMCG, all of BSE’s 12 remaining major sectoral indices ended the
month of June 2025 in green.
Net Foreign Institutional Investors (FII) flows into equities were
positive for June 2025 (at +$1.69 Bn, following +$1.57 Bn in May 2025).
Domestic Institutional Investors (DIIs) remained net buyers of
Indian equities for the 22nd consecutive month (+$8.46 Bn, from
+$7.92 Bn last month, May 2025).
India's high frequency data update:
Record levels of Goods and Services (GST) collections, stable retail
inflation, deflated input inflation, rising core sector outputs, and
elevated credit growth augurs well for the Indian economy.
Purchasing Managers’ Index Manufacturing PMI:
Manufacturing (PMI) in June 2025 rose to a fourteen-month high of
58.4 (vs 57.6 in May 2025), remaining in expansion zone (>50) for the
46th straight month. Driven by new export orders that saw their third
highest growth rate since 2005. Intermediate goods producers led
growth in terms of volume, while the consumer and capital goods
sectors saw moderate growth.
Goods and Services Tax (GST) Collection:
Gross collections of INR 1.84 Tn (+6.2% YoY) in June 2025 concluded
the thirty ninth consecutive month of collections over the INR 1.4 Tn
mark, following previous record collections of INR 2.1 Tn in April 2024.
Rising compliance, higher output prices, rising collections from
imports and domestic transaction volume uptick has driven
elevated tax collections.
Core Sector Production:
The index of eight core sector industries grew by 0.7% YoY in May
2025, against a 0.5% growth in April 2025. Four out of eight
constituent segments grew YoY, driven by Cement (9.2% YoY) and
Steel production (6.7% YoY).
Industrial Production:
Factory output growth as measured by the Index of Industrial
Production (IIP) decelerated MoM to +1.2% in May 2025, vs a growth
of +2.7% YoY in April 2025, driven by growth in manufacturing sector
at 2.6%.
Credit growth:
Scheduled Commercial Bank Credit growth slowed to 9.8% YoY as
of 30th May 2025 against a YoY growth of 16.2% as observed in May
2024, as sector-wise credit in May 2025 slowed down in all sectors.
Agriculture and allied activities credit rose by 7.5 %, lower than 21.6
% a year ago, while industrial sector credit grew by 4.9 per cent,
down from 8.9 % in May 2024.
Inflation:
May’s Consumer Price Index (CPI) inflation rate decelerated MoM to
2.82%, down from 3.16% in April 2025, recording the Lowest YoY
inflation since February 2019. Food inflation came in at a slower
pace MoM, at 0.99%, down from 1.78% in the previous month of April
2025, which is the lowest it has been since October 2021. The
Wholesale Price Index (WPI) inflation rose sequentially, albeit
slower, in May 2025, with the print at 0.39%, 46 bps up from April
2025.
Trade Deficit:
India's merchandise imports were down 1.7% YoY to $60.61 billion in
May 2025, while exports for the month of May 2025 were down 2.77%
YoY to $38.73 billion, resulting in a contraction of the merchandise
trade deficit to $21.88 billion by 0.95% YoY.
Events to watch out for in July 2025:
Trade Related News flow:
Tariff news flow remains volatile with
90-day deadlines upcoming in July 2025. Tariffs will be monitored
closely by the markets. Indian bilateral trade agreements to be
watched.
The Reserve Bank of India’s Monetary Policy Committee (RBI
MPC) Meet:
The MPC will be meeting starting 4th August, 2025 in
what will be the third MPC meet of FY26 and will announce its
decision regarding the benchmark rates on 7th August 2025. In the
Meet held from 4th-6th June, 2025, RBI cut repo rate by 50bps
bringing it down to 5.50%, CRR was also cut by 100bps in an attempt
to improve liquidity in the system. RBI will intend to help boost
India’s single digit credit growth environment.
Federal Open Market Committee (FOMC) Meet:
The Federal Open
Market Committee’s (FOMC) last meet was held on June 16th–18th,
2025 where the Fed Funds Rate were kept unchanged at 4.25% to
4.5%. The minutes of this meeting showed internal concern over the
effects of the Trade policy. Officials said they saw a risk of
persistent inflation, a weakening labour market, and slowing
economic growth. The next FOMC meeting will be held on July
29th–30th, 2025. Economic high frequency data will be a key
monitorable going into the FOMC’s meet.
Other things to watch out for:
Oil Market volatility with the
Organization of the Petroleum Exporting Countries (OPEC+)
increasing production, and Monsoon related news remain key
events for markets to watch out for.
Monthly Performance for Key Indices:
Source:NIMF Research, Bloomberg
.*Calendar year returns.
Note:Market scenarios are not reliable indicators for current or future performance. The same should not be construed as investment advice or as any research report/research recommendation
Past performance may or may not be sustained in future.
Note:Market scenarios are not reliable indicators for current or future performance. The same should not be construed as investment advice or as any research report/research recommendation
Past performance may or may not be sustained in future.
Market View
Equity markets registered gains even as the uncertainties from
global policies, geopolitical tensions continued. Investors
worldwide appeared hopeful that the Tariff challenges may be
addressed with lower economic impact.
Lower inflation and benign interest rate policy are likely to support
domestic economic recovery. Above- average rainfall is driving
optimism in rural focused sectors. Lower interest rates
environment coupled with some tax relief on consumption may
help consumer discretionary segments to perform better in the
coming quarters.
Lower inflation and benign interest rate policy are likely to support
domestic economic recovery. Above- average rainfall is driving
optimism in rural focused sectors. Lower interest rates
environment coupled with some tax relief on consumption may
help consumer discretionary segments to perform better in the
coming quarters.
Increased geopolitical developments has kept markets volatile
post recovery from lows. Despite stabilizing global macros, risks
remain, geopolitical tensions, policy shifts and overall weak
external demand.
Valuations have again firmed up for the broader market after
recent rally. Scope for rerating seems limited hereon and therefore
market may track earnings trajectory for further gains.
Domestic market resilience can be attributed to the underlying
domestic growth dynamics and estimated lower direct impact of
tariffs.
Large Cap & Large Cap oriented strategies along with hybrid funds
appear better placed on risk-reward basis, while Mid/Small cap
allocation may be considered in a staggered manner through
systematic investment with a long-term view.
Overall, we believe while the market may be impacted by macro
developments /events in the near term the medium-term outlook
remains optimistic on supportive domestic fundamentals
Chart of the Month:
India’s current account balance posted a surplus of $13.5 billion, or
1.3% of Gross Domestic Product (GDP), during Q4-FY25. This surplus
comes after a gap of three quarters of deficit, reflecting the
contribution of a surge in services exports.
For FY25, Current Account Deficit (CAD) moderated to $23.3 billion
(0.6% of GDP) from $26 billion (0.7% of GDP) in FY24. This was on the
back of a higher net invisible receipts.
Source:
RBI, NIMF Research
Note:
All data as on 30th June 2025 unless mentioned otherwise
Disclaimer:
The current fund philosophy may change in future depending on market conditions or fund manager’s
views. The
sectors mentioned are not a recommendation to buy/sell in the said sectors. The scheme may or may not
have future
position in the said sectors.
The information herein above is meant only for general reading purposes and the views being expressed
only constitute
opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide
for the
readers. The document has been prepared on the basis of publicly available information, internally
developed data and
other sources believed to be reliable. The sponsors, the Investment Manager, the Trustee or any of
their directors,
employees, Associates or representatives (‘entities & their Associate”) do not assume any
responsibility for, or warrant
the accuracy, completeness, adequacy and reliability of such information. Recipients of this
information are advised to
rely on their own analysis, interpretations & investigations. Readers are also advised to seek
independent professional
advice in order to arrive at an informed investment decision. Entities & the associates including
persons involved in the
preparation or issuance of this material, shall not be liable in any way for any direct, indirect,
special, incidental,
consequential, punitive, or exemplary damages, including on account of lost profits arising from the
information
contained in this material. Recipient alone shall be fully responsible for any decision taken on the
basis of this document