India’s inflation dropped from 5.22% to 4.31% in January, nearing the RBI’s 4% target after staying above 5% for four months. This could lead to rate cuts, as the repo rate stands at 6.25%, per a recent report. The market outlook hints at cautious investor sentiment, likely influenced by macroeconomic factors, sector-specific events, and global financial trends, noted the Motilal Oswal Mutual Fund report.
In February, the Nifty 500 Index dropped by 7.88%, reflecting declines in various sectors. Factor-based strategies mirrored overall market trends, while fixed-income instruments, like the Nifty 5 year Benchmark G-Sec (+0.53%), remained stable. Globally, developed markets had mixed movements with gains in Switzerland (+3.47%) and the United Kingdom (+3.08%), and a contraction in Japan (-1.38%). The US CPI inflation increased slightly to 3% from 2.90% the previous month.
An HSBC report highlighted India’s strong long-term outlook, projecting a medium-term uptrend in the investment cycle. Factors include government spending on infrastructure and manufacturing, a rise in private investments, and a recovery in real estate. The HSBC Mutual Fund’s ‘Market Outlook Report 2025’ foresees increased private investments in renewable energy and technology, along with India playing a larger role in global supply chains, all contributing to faster growth.
The economy shows resilience to global events. The report forecasts a 25 bps rate cut in April by RBI-MPC based on growth-inflation data, recent monetary policy actions, and liquidity tactics. In deciding on a third rate cut during the June meeting, factors like inflation trends, monsoon predictions, and global events will likely play crucial roles.
Sources News From Various Digital Platforms, Websites, Journalists, And Agencies.
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