Market Outlook - February 2025

Market Update

In January 2025, the Indian equities were volatile where the Nifty index declined by 0.6% for the month, registering its fourth consecutive monthly loss. However, the broader markets had a real challenging month with the midcap and small cap indices down 6.1% and 9.9% respectively. All the sectors ended the month in red, with Real - estate, Consumer Durables and Healthcare falling the most by 13.2%, 10.2% and 7.7%, respectively. Key domestic developments included the RBI announcing several measures to enhance liquidity in the banking system and the Q3FY25 earnings broadly being tepid. On the investment front, Foreign Portfolio Investors (FPIs) sold $8.6 billion of Indian equities in secondary market by January 29. Domestic Institutional Investors (DIIs) were net buyers, acquiring $10 billion worth of stocks by the end of the month. Meanwhile, global markets saw mixed results: the Philippines recorded a significant loss of 10.2%, while Thailand (-6.1%) and Malaysia (-5.2%) also experienced declines. On the positive side, markets in Germany (+9.4%), France (+8.1%), and UK (+6.2%) saw gains. International economic developments included the US Federal Reserve maintaining the policy rate steady. Meanwhile, Chinese startup DeepSeek released a cost - effective AI model, raising concerns about increased competition and its implications for the tech sector