India’s Stock Markets Show Strength Amid Global Trade Disruptions
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Synopsis
Despite global trade tensions, India's equity markets show remarkable resilience, with positive macroeconomic indicators and a strong performance in March 2025. The Nifty 50 outperformed major global indices, signaling potential recovery as investors shift focus towards value stocks.
Key Takeaways
- India's BSE 500 gained 6.25 percent in March 2025.
- GDP growth projected at 6.5 percent for FY25.
- March Manufacturing PMI hit 58.1, an eight-month high.
- Nifty 50 fell just 3 percent amid global downturns.
- Market signals suggest potential recovery as investors shift strategies.
Mumbai, April 25 (NationPress) India’s stock market has demonstrated remarkable resilience in the face of global uncertainties, positioning itself effectively in a trade and tariff-altered world, according to a report released on Friday.
The BSE 500 achieved a 6.25 percent increase in March, marking its most impressive monthly performance in the last 15 months, indicating that a significant portion of market excess has likely been rectified.
India’s macroeconomic fundamentals stand out as notably robust. The GDP growth is anticipated to reach 6.5 percent in FY25, bolstered by strong domestic consumption, capital expenditure (capex), and a manufacturing upcycle, as stated in a report by PL Asset Management, the investment management division of PL Capital Group (Prabhudas Lilladher).
The Manufacturing PMI for March surged to 58.1, an eight-month peak, while industrial output recorded a 5 percent year-on-year growth in January.
The resurgence of US-China trade tensions in April 2025 has affected global indices, mirroring market patterns last observed during the 2018 trade conflict.
While indices such as the S&P 500 and Nasdaq experienced declines of 13 percent and 11 percent respectively, India’s Nifty 50 displayed relative strength, decreasing by only 3 percent.
“Spreads for higher risk factors are nearly zero, a historical indicator suggesting that markets may be poised for a recovery phase. Recently, the Quality factor reached its nadir, and we are witnessing early indications of a shift back towards Value, indicating a market inclination towards fundamentally cheaper, cyclical stocks,” the report highlighted.
The dominance of momentum investing has significantly waned, as investors redirect their attention to low volatility assets. The Smallcap outperformance has unwound, with a shift back to Largecaps, reflecting a market preference for size and stability. These trends suggest that the market is gearing up for a recovery phase.
“The recent patterns in early 2025 indicate a modest rise in stocks nearing their lows, reflecting investor caution amidst potential uncertainties or corrections. Nevertheless, with extreme pessimism already factored in, this could indicate that a rebound may be imminent as markets start to factor in a potential recovery,” the report concluded.
“As global markets adjust to a landscape influenced by geopolitical fragmentation and macroeconomic uncertainty, our strategies remain concentrated on adaptive, quantitative frameworks designed to capture alpha across various cycles,” stated Siddharth Vora, Fund Manager and Executive Director of PL Asset Management, PL Capital (Prabhudas Lilladher).
