Market Outlook - September 2025

Market Update

Indian equities fell for the second consecutive month in
August, with the Nifty falling 1.4%. Mid-cap and Small-cap
indices underperformed, falling 2.9% and 4.1%, respectively.
Most sectors closed in the red, except for Auto (+5.8%),
Consumer Durables (+2.0%) and FMCG (+0.2%). Oil & Gas
(-4.7%), Power (-4.6%) and Real estate (-4.5%) were the
worst-hit sectors. Globally, India ranked among the top
underperformers alongside South Korea (-1.8%) and the
Philippines (-1.6%); while Shanghai (+8.0%), Brazil (+6.5%),
and Indonesia (+4.6%) emerged as the best-performing
markets. Foreign Portfolio Investors (FPIs) continued to be
sellers offloading $4.3 billion worth of Indian equities, while
Domestic Institutional Investors (DIIs) remained net buyers,
investing $10.8 billion in the secondary market.
Sentiment in the market remained cautious following the
implementation of steep US tariffs (25%+25%) on Indian
goods. However, consumption-oriented sectors saw a rally
on the government’s plan for rationalization of GST rates.
Global equity markets rose on optimism of a US Federal
Reserve rate cut on the back of Jerome Powell’s Jackson Hole
speech. Divergent monetary policies among major central
banks, and persistent geopolitical tensions fueled investor
caution and volatility, driving investments in gold & silver.