Market Overview – June 2025
Global growth is expected to slow from 3.3% in 2024 to 2.9% in both 2025 and 2026.
Global economy
- Global growth is expected to slow from 3.3% in 2024 to 2.9% in both 2025 and 2026.
- US GDP growth is forecast to fall from 2.8% in 2024 to 1.6% in 2025 and 1.5% in 2026.
- US inflation is near 2.7%, above the Fed’s 2% target, as tariff-related price increases begin to emerge.
- The Fed held rates at 4.25–4.5% in July with two dissents; Jackson Hole remarks hinted at a possible September cut.
Indian economy
- S&P upgraded India’s rating after 18 years, judging the impact of US tariffs manageable.
- Government capex grew 61% in April and 39% in May, with defence spending picking up.
- The RBI cut the repo rate by 100 bps and plans a gradual 100 bps CRR cut; credit growth was 9.5% in Q1 FY26.
- The RBI held the repo rate in August as CPI hit a 77-month low and FY26 inflation was forecast at 3.1%.
Indian stock markets
- The Nifty is flat year-on-year, lagging several global peers amid earnings weakness and macro headwinds.
- Markets rallied sharply in Q1 FY26 after policy support but are down 4% since June 2025.
- Caution stems from US tariff news, geopolitical volatility, subdued Q1 results and reversing FII flows.
Corporate performance (Q1 FY26)
- Nifty 50 companies reported revenue growth of 5.9% and PAT growth of 10.4%.
- Mid-Cap 150 companies reported revenue growth of 9.0% and PAT growth of 20.6%.
- Small-cap companies (3,892) reported revenue growth of 5.7% and PAT growth of –2.9%.
- Top-line growth stayed in low single digits for most, though profitability held up on efficiency gains and lower input costs.
Outlook
- The RBI has infused over ₹10 trillion of liquidity since Q3 FY25, with the repo rate cut by 100 bps and CRR by 150 bps.
- A ₹1 trillion budgetary stimulus and planned second-generation GST reforms should support consumption.
- A good monsoon and rural demand signals support growth, expected to improve from H2 FY26.
- We may trim large-cap exposure and shift toward small- and mid-caps positioned to benefit.
Disclaimer. This overview reflects the views of the Care PMS investment team at the time of publication and is for information only. Investments in equities are subject to market risk. Past performance is not indicative of future returns. Please read the disclosure document carefully before investing.
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