Market performance in H1CY25: From 78K to 71K and back to 83K. Here’s how Sensex staged a swift comeback

The first half of the calendar year 2025 was a rollercoaster ride for the Indian equity markets. The benchmark BSE Sensex started the year at around the 78,000 level, sliding to a 52-week low of 71,400 in April amid global and domestic headwinds, and then rebounded strongly to scale a nine-month high of 84,000 by the end of June - all within six months.

The first six months of the year unfolded in two distinct phases. The initial three months began on a weak note, with a bearish sentiment weighing heavily on the markets, pushing key indices to their 52-week lows by early April. However, the tide turned in the next three months, with the Sensex and the Nifty achieving crucial levels of 84,000 and 25,500, respectively; such levels were last seen in September 2024. This was driven by favourable global developments and the resurgence of foreign portfolio investor (FPI) activity, alongside resilient domestic inflows, which fuelled a strong rebound, enabling markets to recover lost ground.

The Sensex hit a 52-week low of 71,425 on April 7,  but staged a sharp rebound, crossing the 83,600-mark in less than four months, notching a gain of 12,175 points, or 17%. Similarly, the benchmark NSE Nifty50 surged 3,773 points, or 17.35%, from its 52-week low of 21,744, also recorded in April, to close the month of June at 25,517.

A slew of factors, including improving macroeconomic fundamentals and corporate earnings, foreign fund inflows, a pause in U.S. tariff policy, and ease in geopolitical tensions, boosted investors’ appetite for equities.

Of the Nifty 50 pack, Bharat Electronics (44%), Bajaj Finance (37%), SBI Life Insurance (32%), HDFC Life Insurance (32%), and Bajaj Finserv (31%) emerged as the top performers on a year-to-date (YTD) basis. On the other hand, TCS (-15%), Infosys (-15%), Trent (-13%), Wipro (-12%), and Sun Pharma (-11%) were among the top laggards, according to data compiled by Motilal Oswal.

Investors get richer by ₹73 lakh crore

The Sensex has risen by more than 12,000 points in the past three months, making investors richer by over ₹73 lakh crore. The market capitalisation (m-cap) of BSE-listed companies has rebounded by over 18.6% in rupee terms, reaching ₹462 lakh crore at the end of June, up from the low of ₹389 lakh crore in April. On the other hand, the m-cap of NSE-listed companies rebounded over 17% over the same period to ₹458 lakh crore.

Notably, India’s share of the global market cap stood at 4% in June 2025, after touching a 16-month low of 3.6% in February 2025.

Market maintains uptrend for fourth straight month

The Indian equity markets extended their winning streak for the fourth consecutive month in June, with the benchmark indices gaining over 15% during this period. The rally, which began in March, sustained its momentum through April, May, and June, supported by a combination of favourable domestic and global factors. The Sensex and the Nifty rose around 6% in March, followed by gains of 5–5.5% in April, and added around 4% in the next two months, marking a strong and broad-based recovery across the indices.

The rally in the domestic markets was supported by foreign institutional investors (FIIs), who remained net buyers for the fourth consecutive month, infusing $2.4 billion into Indian equities in June 2025. At the same time, domestic institutional investors (DIIs) continued to demonstrate strong participation, with inflows totalling $8.5 billion during the month. This was driven by easing global trade tensions, falling inflation, expectations of monetary easing, and attractive valuations—collectively improving risk sentiment.

However, on a CY25 year-to-date (YTD) basis, FIIs have recorded net outflows of $8.2 billion, a significant increase from the outflows of $0.8 billion seen in CY24. In contrast, DII inflows have remained robust, amounting to $41.5 billion in CY25 YTD, compared to $62.9 billion for the full CY24.

Outlook for the second half of CY25

With the Indian benchmark indices exhibiting remarkable resilience over the past few months, despite a challenging macroeconomic and geopolitical environment, the market is expected to maintain a positive bias going forward.

“We expect the Nifty to maintain a positive bias and gradually head higher towards the all-time high placed around 26,000-26,200 levels in the coming month,” said Bajaj Broking in a report. Since the index has rallied for the fourth consecutive month, some consolidation cannot be ruled out at higher levels. “We believe dips in the coming month should be used as a buying opportunity,” it added.

Technically, key support is placed at 24,800-25,000 levels, being the confluence of 20 days' exponential moving average (EMA) and a recent range breakout area, it said.

Motilal Oswal, in a recent report, said that amid ongoing geopolitical tensions and signs of slowing global growth, India’s macroeconomic outlook presents a relatively resilient picture. Nominal GDP grew by 9.8% in FY25, beating market expectations, and is projected to accelerate further to 10.8% in FY26. Corporate profit growth, which moderated in FY25, is expected to see a gradual recovery going forward.

The market has staged a strong comeback over the past three months, completely reversing its YTD losses. “Currently, the Nifty is trading 7.9% higher in CY25 YTD. With this rally, the Nifty trades at 22.5x FY26E earnings, near its LPA of 20.7x,” the brokerage said.

Ajit Mishra, SVP-Research, Religare Broking, presented a cautiously optimistic view on the market outlook for H2CY25. “Corporate earnings could grow in the mid-teens, driven by a low base, benefits from RBI’s monetary easing, and expectations of lower inflation. Softer inflation may support demand recovery and improve operating margins, especially in consumption and rate-sensitive sectors.”

“However, heightened global macroeconomic and geopolitical uncertainties remain key risks. While India’s domestic fundamentals are relatively strong, it may still face spillover effects from global disruptions. As a result, while the earnings outlook is encouraging, we believe a measured and stock-specific approach remains essential in the current environment,” he added.