Put up Views: 15
Fairness Market Insights:
Fairness markets stay in a optimistic bias except some catastrophe happens that would break the upside momentum. Policymakers are fast to course right when markets throw tantrums. As we recall, the BSE Sensex corrected by 8.3% between October 2024 and March 2025. We noticed some necessary elements coming collectively to weigh in the marketplace sentiment throughout this time. Forward of elections, the federal government decreased spending, and the RBI tightened liquidity by Rs 3–4 lakh crore to assist the rupee. This, mixed with slowing consumption, weak company earnings and world tariff issues, led to the correction.
The latest Apr–Jun 2025 quarter introduced a welcome summer time rally for traders. The Sensex gained round 10%, with most main sectors performing well- actual property and monetary providers main the way in which. What drove this uptick? Anticipated improve in company income, easing geopolitical tensions, a pause in world tariff choices, surplus liquidity and FPIs turning web patrons for the complete quarter.
Fairness markets within the US additionally hit document ranges attributable to ease of geopolitical tensions, dovish fed and commerce developments, however financial information launched in early July for Q1 2025 (Jan-Mar) presents a combined image. In Q1’25 US Economic system contracted at a fee of 0.5% annual fee, the primary detrimental studying since Q1 2022. On the identical time, inflation within the US stays above goal (Core PCE at 2.7% in Could), making rate of interest choices difficult. The area will stay delicate to information round inflation, charges, and commerce going ahead.
What can we count on for Indian markets within the close to time period? India Inc’s company revenue progress has been modest up to now (Nifty firms are anticipated to develop June quarter web income by 4.6% YoY). Financial and financial insurance policies choices within the type of the latest fee cuts and finances tax breaks can elevate family consumption, particularly within the festive season forward. Consumption already accounts for ~63% of India’s GDP, and this home power is essential to cushion the impression of world uncertainties.
We stay cautiously optimistic as supply-side pressures in fairness markets are rising once more and pose a key threat for fairness returns. Total provide is up sharply. Bulk & Block offers (B&B), IPOs, Rights Points, QIPs are up 103.5% q-o-q and 10.8% y-o-y.
Elevated valuations on the again of a rebound in investor sentiment additionally make the market extra delicate to detrimental surprises. Massive caps are buying and selling near their historic averages whereas mid & small caps are at 22% and 44% premiums respectively. If we see the info, massive caps have clearly been extra resilient for YTD 2025: Massive caps are up 5.2%, whereas mid-caps are practically flat, and small-caps have declined. We stay targeted on staying disciplined in our strategy- backing high-quality, large-cap worth portfolios that helps managing threat and supply higher upside potential with a long-term view.
Debt Market Insights:
Charge cuts are right here, what does it imply for the bond markets?
The Reserve Financial institution of India (RBI) has formally moved right into a rate-cutting cycle, delivering a complete 1% discount within the repo fee since February 2025. The cuts got here in three rounds- 25 bps every in February and April, and a extra aggressive 50 bps in June. This shift clearly alerts that the inflation battle is, for now, below management. The truth is, retail inflation in June hit a six-year low of two.1%, pushed largely by falling meals costs. Sturdy agricultural sowing and good reservoir ranges additionally level to a benign meals inflation outlook within the coming months. Nonetheless, we stay watchful of world dangers, significantly any recent volatility from commerce developments or oil value shocks.
The RBI has made it clear: the precedence now could be to stimulate home consumption and personal funding. Entrance-loading fee cuts are a strategic transfer to spice up financial momentum and revive the credit score cycle, which is a vital transmission channel in India. Traditionally, when banks sense stronger financial momentum, they’re extra prepared to lend. But when they understand dangers forward, they have an inclination to tug again, particularly in lending to NBFCs or precedence sectors like agriculture, as we noticed in 2024. With rates of interest easing and inflation subdued, monitoring home credit score tendencies within the coming months shall be necessary.
The bond market has responded rapidly to the 1 share level repo fee minimize. As anticipated, short-term yields have fallen quicker than long-term ones, resulting in a steepening yield curve. This can be a traditional signal that we’re seemingly approaching the tip of the rate-cut cycle, particularly with the RBI now shifting its stance from “accommodative” to “impartial”.
On this setting, short-duration debt funds are higher positioned than long-duration ones, as they profit extra from near-term fee changes and system liquidity.
Arbitrage funds stay a lovely possibility for short-term money administration, providing tax-efficient returns. However given their sensitivity to fairness market swings, we advocate pairing them with ultra-short-term debt funds to take care of portfolio stability and liquidity.
Different Asset Courses:
Gold as an asset class has delivered the very best returns month over month in 2025 up to now, pushed by world macro and financial tailwinds. Gold Mini is up 24.3% YTD’25 and 32.11% within the final one yr.
As we’ve persistently advocated, sustaining a strategic allocation of 10 – 20% to gold can improve portfolio resilience, particularly in periods of heightened world financial uncertainty. This quarter was one other sturdy validation of that view.
Coming to actual property, India’s prime residential actual property markets noticed a 14% year-on-year decline in gross sales throughout the June quarter, largely pushed by pricing issues. New undertaking launches additionally slowed, as world geopolitical uncertainty weighed on demand. Affordability challenges are more and more straining the broader housing market. In the meantime, builders are shifting their focus towards the premium section, which has remained extra resilient.
Nonetheless, actual property total has develop into costly. We’re advising shoppers to keep away from recent property purchases at this stage. Given elements like illiquidity, cyclical tendencies, value volatility, and prolonged holding intervals, we advocate capping actual property publicity at 20–25% of your whole portfolio.
Truemind’s Mannequin Portfolio – Present Asset Allocation
Private Finance Capsule:
Altering world order and what you need to do?
Greed is sweet or unhealthy?
