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Nifty Outlook 2025: India’s equity markets are expected to maintain their resilience through the second half of 2025
Nifty Outlook 2025
Nifty Outlook 2025: India’s equity markets are expected to maintain their resilience through the second half of 2025, with the Nifty50 projected to trade within the 26,300–27,500 range by year-end, according to insights from smallcase managers. The positive outlook is underpinned by robust domestic macroeconomic fundamentals, a supportive monetary policy environment, and policy-led momentum across key sectors.
Nifty50 Technical Setup
After rebounding from the March 2025 lows, the Nifty50 has regained upward momentum. According to smallcase managers, the index may face initial resistance near 26,300. However, a decisive breakout could set the stage for a rally toward 27,500 or higher, fuelled by strong corporate earnings and sustained liquidity.
Global & Domestic Catalysts
The trajectory of Indian equities will be shaped by both global and domestic developments. Key macro and geopolitical triggers include:
- Clarity on US trade tariff policies
- Progress on the UK–India Free Trade Agreement (FTA)
- Easing of conflicts in the Indo-Pacific and Middle East
Successful resolution of these factors could open up export opportunities in sectors such as pharmaceuticals, engineering, and textiles.
While US inflation remains a key variable, a stable global supply environment and timely trade deals could pave the way for the U.S. Federal Reserve to begin rate cuts—potentially boosting foreign inflows into Indian markets.
Interest Rate Outlook
So far in 2025, the U.S. Fed has held rates steady amid persistent inflation and employment concerns. In contrast, the European Central Bank (ECB) has already cut rates by 100 basis points, a move that could influence the Reserve Bank of India (RBI) to consider similar action. Rate cuts in India would support consumption and uplift investor sentiment.
Dr. Vikas Gupta, CEO of Omniscience Capital, believes a combination of rate cuts and stable monsoon conditions could further drive household consumption and GDP growth. He expects equity valuations to revert to the five-year average price-to-earnings (P/E) ratio of 25, or even exceed it, if the earnings cycle remains strong.
However, Robin Arya, Founder of GoalFi, cautioned that the expiry of the U.S. tariff moratorium poses near-term risks. A delay or failure in trade negotiations could trigger volatility in Indian equities, he warned.
H1 2025 Recap: Resilience Amid Global Uncertainty
The first half of 2025 was marked by heightened global uncertainty. Delays in U.S. rate cuts, elevated crude oil prices due to Red Sea tensions, and renewed skirmishes along the India–Pakistan LoC led to foreign investor outflows. Indian equities corrected in February and March, which smallcase managers view as a healthy consolidation following the steep gains of 2023–24.
Despite global headwinds, India’s inflation remained within the RBI’s 4–5% target band. The central bank kept its repo rate steady at 6.50%, underscoring its commitment to macroeconomic stability.
Technical View: Axis Capital
Axis Capital maintains a bullish outlook on the Nifty, citing a continued pattern of higher highs and higher lows. The index is currently trading above its 20-, 50-, 100-, and 200-day moving averages, indicating sustained strength.
The formation of a bullish monthly candle points to short-covering at lower levels, while the weekly RSI remains in positive territory. Axis expects the index to trade in a near-term band of 24,500 to 26,100, and recommends a “buy on dips” strategy. A fall below 25,200 may trigger some profit-booking, but the broader structure remains constructive, with sectoral rotation offering additional support.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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