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Fairness Market Insights:
Fairness markets stay in a constructive 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 essential components coming collectively to weigh available on the market sentiment throughout this time. Forward of elections, the federal government decreased spending, and the RBI tightened liquidity by Rs 3–4 lakh crore to help the rupee. This, mixed with slowing consumption, weak company earnings and international tariff considerations, led to the correction.
The current Apr–Jun 2025 quarter introduced a welcome summer season rally for traders. The Sensex gained round 10%, with most main sectors performing well- actual property and monetary providers main the best way. What drove this uptick? Anticipated enhance in company income, easing geopolitical tensions, a pause in international tariff choices, surplus liquidity and FPIs turning web patrons for your complete quarter.
Fairness markets within the US additionally hit report ranges as a consequence of ease of geopolitical tensions, dovish fed and commerce developments, however financial information launched in early July for Q1 2025 (Jan-Mar) presents a blended image. In Q1’25 US Financial system contracted at a charge of 0.5% annual charge, the primary adverse studying since Q1 2022. On the similar time, inflation within the US stays above goal (Core PCE at 2.7% in Might), making rate of interest choices difficult. The area will stay delicate to information round inflation, charges, and commerce going ahead.
What can we anticipate for Indian markets within the close to time period? India Inc’s company revenue progress has been modest up to now (Nifty corporations are anticipated to develop June quarter web income by 4.6% YoY). Financial and monetary insurance policies choices within the type of the current charge cuts and funds 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 crucial 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 adverse surprises. Giant caps are buying and selling near their historic averages whereas mid & small caps are at 22% and 44% premiums respectively. If we see the information, massive caps have clearly been extra resilient for YTD 2025: Giant caps are up 5.2%, whereas mid-caps are almost flat, and small-caps have declined. We stay centered 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 charge 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. In actual fact, 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. Nevertheless, we stay watchful of world dangers, significantly any contemporary volatility from commerce developments or oil worth shocks.
The RBI has made it clear: the precedence now could be to stimulate home consumption and personal funding. Entrance-loading charge 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 a tendency 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 traits within the coming months will likely be essential.
The bond market has responded rapidly to the 1 share level repo charge 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 top of the rate-cut cycle, particularly with the RBI now shifting its stance from “accommodative” to “impartial”.
On this surroundings, short-duration debt funds are higher positioned than long-duration ones, as they profit extra from near-term charge changes and system liquidity.
Arbitrage funds stay a beautiful 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 Lessons:
Gold as an asset class has delivered the best returns month over month in 2025 up to now, pushed by international macro and financial tailwinds. Gold Mini is up 24.3% YTD’25 and 32.11% within the final one 12 months.
As we’ve constantly advocated, sustaining a strategic allocation of 10 – 20% to gold can improve portfolio resilience, particularly during times of heightened international 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 through the June quarter, largely pushed by pricing considerations. New mission launches additionally slowed, as international 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.
Nevertheless, actual property general has change into costly. We’re advising shoppers to keep away from contemporary property purchases at this stage. Given components like illiquidity, cyclical traits, worth volatility, and prolonged holding durations, we advocate capping actual property publicity at 20–25% of your whole portfolio.
Truemind’s Mannequin Portfolio – Present Asset Allocation
Private Finance Capsule:
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