Market Outlook - June 2025

Market Update

The month of May was a very eventful one. Concerns over US-China tariff gridlock and a conflict of the extent not seen since 1971, between India and Pakistan; led to concerns among investors. The markets reacted in the first 10 days of the month. However, a quick agreement to pause hostilities between Indian and Pakistan lifted spirits. US and China also agreed to lower the tariffs and discuss resolution in the near future, aiding sentiments. Indian equities bounced back, ending with gains for the third straight month, with benchmark Nifty index rising 1.7%. Broader markets outperformed significantly with midcap and small cap indices up 6.1% and 8.7%, respectively. All the sectors were positive for the month, except for FMCG which was down 0.7%. Capital Goods, Real Estate and Metals were the best performers with 13.2%, 7.2% and 5.9% returns, respectively. Globally, most markets ended higher wherein, Germany (+6.7%), US SPX (+6.2%) and Indonesia (6%) being the top gainers. Thailand (-4.0%), Malaysia (-2.1%) and Philippines (-0.2%) were the biggest losers. FPI’s bought equities worth $1.7 billion, while Domestic Institutional Investors (DIIs) continued their positive stance with a significant $7.9 billion inflow.