Category: Money Trends

Domestic equity markets declined amid ongoing uncertainty surrounding the U.S. President’s plans for reciprocal tariffs, raising concerns about a prolonged trade war and potential inflationary pressures. Investor sentiment was further dampened by the U.S. Federal Reserve’s statement that it is “not in a hurry to lower interest rates” and plans to “pause rate cuts to evaluate further progress in inflation.”

Domestic equity markets fell during the month on uncertainty over the U.S. trade policies under the new U.S. President’s regime.

The U.S. President gave a mixed set of signals, as he delayed tariff plans on Chinese goods but threatened to impose tariffs on Canada and Mexico. Losses were extended on concerns over a weakening rupee, rising crude oil prices and continued outflows by the foreign institutional investors from domestic equity markets.

However, losses were restricted as sentiment was boosted after the RBI announced several measures to inject over Rs. 1 lakh crore liquidity into the banking system. Investors reacted positively to the Economic Survey 2025 tabled in the Parliament on Jan 31, 2025, that pegged GDP growth between 6.3% to 6.8% for FY26.

The 2025-2026 Union Budget presents a comprehensive plan aimed at revitalizing the economy, empowering the middle class, and fostering inclusive growth. As stakeholders in India’s economic development, it is imperative that we align our strategies to leverage these opportunities and contribute to the nation’s progress.

Domestic equity markets rose initially on expectations of policy easing by the RBI following the weaker-than expected GDP figure in the second quarter of FY25 of domestic economy. Meanwhile, the RBI monetary policy committee In its Dec2024 policy meeting kept repo rate unchanged at 6.5%for the eleventh consecutive time but reduced the cash reserve ratio by 50bps to 4.0% to boost liquidity.

India’s growth story remains intact, powered by structural reforms, expanding global competitiveness, and robust economic resilience. Explore key insights and strategies to navigate the year ahead.

Domestic equity markets remained volatile during the month under review as markets rose initially after the former U.S. President and Republican candidate took a decisive lead in the 2024 U.S. election, which increased the expectation of tax cuts and increased government spending in the U.S. However, the trend reversed as sentiment was weighed on concerns over potential impact of the newly elected U.S. President’s protectionist policies on the global economy as investors awaited clarity on the President’s policy proposals on global geopolitics, U.S.- China relations, NATO, immigration, and economic policies.

Explore key trends and performance insights shaping the quarterly market landscape.

October proved challenging for domestic equity markets, as mounting concerns over the Middle East conflict led to a broad decline across all sectors. Sectoral indices reflected this downturn, with each registering losses over the month. However, on a calendar-year-to-date (CYTD) basis, the pharmaceutical sector stands out as a resilient performer, showing the strongest returns amidst market volatility. The downward trend wasn’t limited to India; global equity markets also experienced a similar slide, impacted by international uncertainties.

Valuations remain elevated but are expected to normalize as earnings growth catches up. The market may not see the PE expansion witnessed earlier; rather, it could trade in a narrower PE range of 18x-22x, depending on how corporate earnings evolve.

Domestic equity markets started the month on weaker note amid weak global cues as sentiment was dampened following weak U.S. manufacturing data of Aug 2024, which reignited concerns over an economic slowdown in the world’s largest economy.