The Month That Was : October 2025

Indian equity markets ended October with strong gains, as the Nifty 50 Index rose by 4.5%. Broader markets outperformed, with mid-cap and small-cap indices gaining 5.8% and 4.7%, respectively. All sectoral indices ended higher with the real estate, IT, oil & gas sectors being the key outperformers, rising 9%, 7%, and 6%, respectively. Globally, markets remained buoyant with South Korea, Japan, and Taiwan posting strong gains of 20%, 17%, and 9%, respectively.

Investor sentiment was supported by robust festive demand, easing global trade tensions, and better than expected 2QFY26 earnings. Other key developments during the month included the RBI Monetary Policy Committe maintaining the repo rate at 5.5% with a neutral stance and the IMF revising India’s FY26 GDP growth forecast upwards to 6.6%. On the macro front, CPI inflation eased sharply to 1.5% in September due to a fall in food prices, even as core inflation edged up to 4.5% led by bullion prices. WPI inflation moderated to 0.13%, while IIP growth slowed slightly to 4%. On the flows front, FPIs were net buyers to the tune of USD 2 billion, while DIIs bought USD 5.9 billion in the secondary market. 

Market Outlook:

After a period of underperformance by Indian markets vs global peers on the back of high trade tariffs and muted corporate earnings, the month of October acted as a turning point for Indian markets. With the likelihood of an early closure of the trade deal between India and USA and corporate earnings starting to pick up on the back of strong festive consumption due to GST rate rationalization, Indian markets are looking up, supported by FII flows turning positive in October. Indian markets and domestic focused sectors are likely to remain supported by strong domestic demand, robust FPI and DII flows, and improving corporate earnings momentum. The festive season’s buoyant consumption trends and a stable policy environment have provided confidence for sustained economic growth ahead. With stable macro economic parameters and global trade sentiments improving, India remains one of the most attractive emerging markets in the world.

Happy Investing!