Market Outlook
| April 30, 2025 | 1 Month |
1 Year |
|
| Rupees per Dollar | 84.50 | 85.51 | 83.44 |
| Oil (dollars per barrel) | 63.12 | 74.95 | 87.86 |
| Retail inflation (CPI) | 3.34% (March) | 3.61% | 4.85% |
- European Central Bank (ECB) cut its policy rates by 25 bps to 2.25%. US Federal Reserve is expected to keep the policy rate unchanged as they would like to await for the outcomes of the latest tariffs hike by the Trump administration on inflation
- RBI announced Open Markets Operations (OMO) to purchase ₹ 1250 billion of government securities in four tranches in the month of May 2025
- Crude oil prices dropped below $60 as OPEC+ announced further output hikes
- We remain ‘neutral’ on the outlook for bond markets
- The OMO’s and FX swaps undertaken by the RBI will ensure durable liquidity remains surplus going forward, which will be supportive for the short-medium term segment. We expect the 10 year G-sec yield to trade in a range of 6.25%-6.40% in the near term
- Market will be watchful of global developments and its impact on the exchange rate
| Index | 1 month (%) | 1 year (%) | 3 years (%) |
|---|---|---|---|
| NIFTY50 | 3.5 | 7.7 | 12.5 |
| BSE100 | 3.2 | 6.8 | 13.0 |
| NIFTY500 | 3.2 | 4.9 | 14.2 |
| NIFTY Midcap100 | 4.7 | 6.4 | 21.9 |
At April 30, 2025
Nifty was up 3.5 % for the month of April 2025
- Both FIIs and DIIs continued buying during the month
- Within BSE 100 index, amongst sectors Insurance/Oil & Gas outperformed while Metal & Minerals/Technology underperformed the broader market
Our outlook remains cautious in the short term while it remains positive in the medium term
- Rising recession risk in USA and heightened geo-political tension with neighbors is a key near term issue
- Q4-FY2025 earnings season has been muted so far, however largely inline with expectations
- FII flows seem to have turned positive amidst fears around lower global growth and tariff uncertainty while domestic flows remain strong
- The Nifty’s P/E is trading at 21x for FY2026E trading near its 5-year average
In the medium term, we expect certain important drivers for growth:
- Domestic policy pivot has shifted in favour of ‘growth’ (CRR cut, rate cut, liquidity infusion, lower risk weights and tax cuts)
- India benefits from structural levers in the form of demographic benefits, rising formalisation, manufacturing focus and digitisation
- Corporate balance sheets remain strong which positions them well for next leg of growth
- Earnings trajectory will be key monitorable over medium term
Market consensus for Nifty earnings CAGR over FY2025-FY2027 at 11%
COMP/DOC/May/2025/75/0173
