June 2025 Market Update: India Shines Amid Global Storms
Global Turmoil, But India Stays Strong
While the world economy struggled with Iran-Israel tensions and shaky U.S. trade policies, India’s financial markets staged a powerful comeback. The Nifty 50 recovered to levels last seen in September 2024, and Foreign Portfolio Investors (FPIs) pumped ₹14,590 crore into Indian equities.
Oil Prices Volatile, India Adjusts Smartly
Middle East tensions sent oil prices soaring. But India acted fast—boosting oil imports from the U.S. and Russia to avoid supply shocks. The good news? Brent crude dropped to $68/barrel after a ceasefire hint.
Gold Tops Euro in Global Reserves
In a historic shift, gold overtook the Euro as the second-largest global reserve asset, rising to 20% of central bank holdings. Gold prices hit $3,319/ounce, and silver climbed to $37/ounce, driven by industrial demand.
RBI Cuts Rates, Boosts Liquidity
The Reserve Bank of India (RBI) slashed the repo rate to 5.5% and the CRR to 3%, injecting over ₹9.5 lakh crore liquidity into banks. This move aims to lower loan interest rates, support credit growth, boost consumer demand and business expansion.
Retail Inflation Falls to 2.82%
India’s inflation eased due to falling food prices. In May 2025:
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Food inflation dropped to 0.99%
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Vegetables (-13.7%) and pulses (-8.2%) fell sharply
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Core inflation remained sticky at 4.2%, impacted by rising gold prices
Current Account Turns Surplus
India posted a $13.5 billion current account surplus in Q4 FY25—helped by booming software exports and rising remittances. Foreign exchange reserves rose to $697.9 billion, strengthening the rupee.
Core Sector & Exports Slow Down
India’s industrial growth slowed to 1.2% in May due to an early monsoon and weak global demand. Exports and imports both declined slightly, but the trade deficit narrowed to $21.88 billion.
Banks See Best Asset Quality in Years
India’s banks are in great shape:
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Gross NPA down to 2.3%
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Net NPA at 0.5%
This shows improved repayment and better credit quality.
Big Boost to Renewables
India’s renewable energy capacity jumped to 220.1 GW, led by solar. A ₹5,400 crore plan for Battery Energy Storage was also launched to ensure grid stability.
Corporate Earnings Improve
BSE 500 companies posted 10% profit growth in Q4 FY25.
Key performing sectors:
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👍 Strong: Metals, Cement, Pharma, Telecom
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😐 Neutral: IT, Private Banks
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👎 Weak: Auto, PSU Banks
Global Snapshot
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U.S. Fed kept rates steady at 4.25–4.5%
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China’s exports to the U.S. fell 34%
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Bank of England held rates at 4.25% as inflation rose to 3.4%
Domestic Highlights
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India’s GST collection reached a record ₹22.08 lakh crore
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SIP inflows hit an all-time high of ₹26,688 crore in May
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Unemployment rose slightly to 5.6%
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New gold loan rules issued by RBI for high-value loans
Final Thoughts
India’s economy showed remarkable resilience in June 2025—despite global uncertainties. From falling inflation and strong FPI flows to renewable growth and robust banking health, the country remains on a solid path forward.