Market Review
Asset class performance trends
Geographical performance trends based on MSCI country level Indices
Sectoral performance trends
Global market performance (April 2025)

Global equity markets were turbulent this month, with US equities sharply
declining following the "Liberation Day" tariff announcements. The VIX spiked
above 50, bringing equities close to bear market territory. However, US markets
recovered later in the month amid signs of a tariff pause and hopes for deescalation
through bilateral negotiations. European markets also experienced a
recovery, driven by hopes of easing trade concerns, expectations of trade
negotiations, and the US softening automotive tariffs. European markets
continued to be supported by hopes of increased expenditure, especially led by
Germany. Key economic data and regional cues further contributed to the
recovery. Conversely, Chinese markets remained negative due to profit
booking and the delay in fresh stimulus measures from Beijing to counter higher
US tariffs
Domestic Market Performance (April 2025)

The domestic markets faced volatility early in the month due to the reciprocal
tariffs announced by the US President on April 2, which led to market
uncertainty. However, the 90-day pause on these tariffs provided some relief.
Consequently, the markets rebounded positively for the second consecutive
month, with the Nifty index rising by 3.5%. Nifty Midcap 150 and Nifty
Smallcap indices also participated in the rally, increasing by 4% and 1.7%,
respectively. The market gains were driven by several factors: The India
Meteorological Department's forecast of above-normal monsoon rainfall, along
with the return of foreign portfolio investors and continued Domestic
Institutional Investors support.
Additionally, RBI's decision to reduce the repo rate by 25 basis points to 6% and
adopt an accommodative stance helped market sentiments. The RBI also
relaxed lending norms which are anticipated to improve credit availability and
support growth in the banking and financial sectors. Overall, multiple factors
contributed to the market's positive performance.
Macroeconomic indicators:
Crude oil prices – Brent

The month saw crude oil prices decline due to concerns over rising supply from
the Organization of the Petroleum Exporting Countries (OPEC) and its allies,
coupled with the potential impact of US tariffs. Prices fell further on
expectations of increased output from Saudi Arabia and a weak demand
outlook.
USD INR

For the month ended April 2025, the Rupee appreciated by another 1.1% against
the US dollar. This is largely because the US Dollar Index (DXY) lost 4.6% due to
fear of stagflation, i.e rising inflation and falling growth as also escalating trade
war and policy uncertainty.
Commodity price trend
Forex reserves

India's foreign exchange reserves rose by 3.4% to $688 billion as of April 25,
2025.
Inflation

In March 2025, India's headline CPI inflation declined to 3.3% -a 67-month low.
This decrease was primarily driven by moderation in food prices. The decline in
global commodity prices also helped ease some of the pressures from imported
inflation.
Core inflation remained steady at 4.1% in March 2025 due to persistent price
pressures in non-food and non-fuel items, particularly in gold, which
contributed significantly.
Industrial production

Industrial production also rose, driven by gains in the electricity and
manufacturing sectors in March 2025.
PMI Indicators

The Manufacturing Purchasing Managers Index (PMI) increased in April 2025,
indicating strong business activity driven by robust demand and a sharp rise in
international orders. Services PMI also rebounded, supported by strong
demand from both domestic and international markets and an increase in new
order flows.
GST Collection

GST collections for April 2025 stood at INR 2.36 trn. Gross GST collections have
shown sequential improvement to grow 13% YoY.
FII/DII equity flows

FIIs and DIIs were net buyers for the month.
Domestic Interest rate trend

The RBI unanimously reduced the policy rate by 25 basis points to 6% and
decided to change the stance from neutral to accommodative in its April 2025
monetary policy meeting.
Domestic Liquidity Conditions

Liquidity conditions eased with a surplus of INR 1.29 lakh crore at the end of
April 2025, recovering from the deficit observed in the last week of March 2025.
This is due to the Reserve Bank of India's (RBI) strategic interventions, including
purchases from OMOs, VRR auctions, and long-term USD/INR Buy/Sell Swap
auctions, which have alleviated liquidity tightness in the fixed income market.
Yield Curve

10-year yield fell from 6.58% to 6.36% (23 basis points decline) as softening of
interest rates globally, downward revisions in domestic inflation and growth
forecasts, expectations of dovish interest regime in coming months, led to yields
moving southwards.
Domestic Macros Heatmap
Source: Bloomberg, RBI, MOSPI, Morgan Stanley