Factsheet Index
Macro and
Equity Market
Outlook
GLOBAL MACRO & MARKETS
India’s NSE NIFTY index ended the month of February 2025 in red (-5.9%). Among major global indices, the S&P500 (-1.4%), Morgan Stanley Capital International (MSCI) World (-0.8%), the Euro 50 (3.3%), the Japanese NIKKEI (-6.1%) ended the month, February 2025 with largely negative returns. Performance was mixed among Emerging Market (EM) indices as well, with the Morgan Stanley Capital International Emerging Markets (MSCI EM), Hang Seng (Hong Kong), the BOVESPA Brazil (BVSP) recording sequential returns of (+0.4%), (+13.4%), and (-2.6%) respectively.
The London Metals Exchange (LME) Metals Index rose (+2.9%) in February 2025, as aluminum and tin metals rallied. West Texas Intermediate (WTI) and Brent Crude fell MoM, by (-3.8%) and (-4.7%), respectively, as markets remained cautious given a stronger dollar, and tariff fears.
The Dollar index remained flat (-0.7%), through February 2025, with the US Dollar (USD) appreciating vis-à-vis Emerging Market (EM) currencies (+1.1%) and appreciating against the Indian Rupee (INR) on the spot market (+1.0%). India 10Y G-Sec yields rose by (+3 bps), while US 10Y G-Sec yields fell by (-33 bps), and the German Bund yield fell by (-5 bps), with rates settling at 6.73%, 4.21% and 2.4%, respectively.
Domestic Macro & Markets
The BSE SENSEX (-5.6%) fell in February 2025, in line with the NSE NIFTY index. The BSE Mid-cap index and the BSE Small-Cap index underperformed the BSE SENSEX, falling by (-10.4%), and (-13.8%) over the month, February 2025 respectively. Sector-wise, Capital Goods, Public Sector Utilities (PSU), Realty were the top underperformers over the month, February 2025 clocking (-14.4%), (-13.5%), and (-13.4%), respectively. All of BSE’s 13 major sectoral indices ended the month, February 2025 in red.
Net Foreign Institutional Investors (FII) flows into equities were negative for February 2025 (at -$3.98 Bn, following -$9.0 Bn in January 2025). Domestic Institutional Investors (DIIs) remained net buyers of Indian equities for the 19th consecutive month (+$6.0 Bn, from +$10 Bn last month, January 2025)
India's high frequency data update:
Record levels of Goods and Services Tax (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:
India’s Manufacturing Purchasing Managers’ (PMI) in February 2025 fell to a 14-month low of 56.6 (vs 57.7 in January 2025), remaining in expansion zone (>50) for the 43rd straight month. New export orders modestly declined in February 2025 from its 14-year high in January 2025 but remained strong as firms reported an increase in sales from all regions. Among the price-related sub-indices both the input and output price index remained in the expansionary territory, however the pace of expansion continued to decline in February 2025 (vs. January 2025).
Goods and Services Tax (GST) Collection:
Gross collections of INR 1.84 Tn (+9.1% YoY) in February 2025 concluded the thirty sixth 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, festive season demand, 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 (+4.6%) YoY in January 2025, against a (+4.0%) growth in December 2024, as an unfavourable base effect came into play. Six out of eight constituent segments grew YoY, driven by Cement production (14.5% YoY).
Industrial Production:
Factory output growth as measured by the Index of Industrial Production (IIP) decelerated MoM to (+3.2%) in December 2024, vs a growth of (+5%) YoY in November 2024, driven by slowing, but positive growths in 3 of 3 major sectors- Manufacturing, Mining, Electricity.
Credit growth:
Scheduled Commercial Bank Credit growth reached (+11.26%) YoY as of 7th February 2025 against a YoY growth of (+20.34%) as observed on 9th February 2024, as a strong base effect came to play, amid changes to Reserve Bank of India (RBI’s) norms for risk weights and changes to the Liquidity Coverage Ratio (LCR) norms.
Inflation:
January’s 2025 Consumer Price Index (CPI) inflation rate decelerated MoM to (4.31%), down from (5.22%) in December 2025. Food inflation came in at a slower pace MoM, at (5.68%), down from (7.69%) in the previous month, January 2025. The Wholesale Price Index (WPI) inflation fell sequentially in January 2025, with the print at (+2.31%), 6 bps down from December 2024.
Trade Deficit:
Indian Merchandise Exports fell by (2.38%) YoY to $36.4 Bn in January 2025, while Imports rose by (+10.28%) YoY to $59.42 Bn. Merchandise trade deficit rose by (38.83%) YoY to $23 Bn.
Events to watch out for in March 2025:
High Frequency Data Revival in India:
India high frequency data revival to be monitored by markets, namely in auto sales, Services and Composite PMI, credit growth and residential sales data.
Government Capex:
Consumption numbers, utilization levels, corporate spending remain key monitorables from the market’s perspective, along with central government capex.
Other things to watch out for:
Oil Market volatility, Tariff and Heat Wave related news remain key events for markets to watch out for.
Monthly Performance for Key Indices:
Source: 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.
Market View
Indian Equity Market correction continued across categories with some segments seeing a fall from their recent highs.
This downturn in the equity markets is primarily attributed to global economic factors, including Uncertainty due to US policy environment, Interest rates challenges and above all weaker near-term earnings in India.
3rd quarter earnings continue to remain weak and in line with the results of the first 2 quarters. Certain segments like – Industrials, Power, small and midcaps, etc. have sharp corrections as well.
Looking ahead the equity markets are likely to reflect the earnings growth.
Global policy stance especially the tariff actions by the US and responses from impacted countries is likely to impact the market sentiments. US policy actions – especially Tariff related factors – can lead to changes in global supply chains and can impact on near term growth.
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 investments.
Overall, we believe while the market may consolidate in the near term the domestic fundamentals / lead indicators remain supportive and offer reasonable possibilities from a medium-term perspective.
Chart of the Month:
India's Gross Domestic Product (GDP) growth picked up pace in Q3 to 6.2% with primary driver of growth being Agriculture and Services from the supply side and Private and Government consumption from the expenditure side. Growth for previous 2 years were revised sharply higher to 9.2% for FY24 (from 8.2%) and 7.6% for FY23 (from 7.0% earlier). However, Q4 growth will be supported by revival in consumption demand (especially Rural), boost from Maha Kumbh and pick up in Government expenditure. On expenditure side, growth was supported by improvement in private consumption growth at 6.9% from 5.9% in Q2 and sharp pick up in government consumption at 8.3% from 3.8% in the previous quarter. Investment growth softened to 5.7% from 5.8% despite a sharp jump in central government spending (47.0% YoY growth as per monthly Comptroller and Auditor General of India (CAG report). This implies private capex growth has remained sluggish in Q3. Private Final Consumption Expenditure (PFCE) contributed 66.0% to GDP growth during the quarter while Investments contributed 29.0%. Nominal GDP growth for the quarter was 9.9%.
Source:
NIMF Research, CEIC
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The sectors mentioned are not a recommendation to buy/sell in the said sectors. Details mentioned above are for information purpose only.

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