Market Outlook June 2025

12 Month outlook for Equity, Debt & Gold

Gold: Gold prices are expected to maintain a bullish trend over the next 12 months, driven by geopolitical tensions, central bank demand, recession and inflation expectations. Gold price expected to be in the range of the base case USD3100 –USD4000. 

Debt: India’s 10-year G-Sec yield is expected to moderate to a range of 6.0–6.5% by June 2026, driven by anticipated Reserve Bank of India (RBI) rate cuts, and fiscal consolidation. However, risks such as inflation, global yield spikes, and domestic GDP challenges could keep yields volatile, potentially capping declines or pushing them toward 6.8% in adverse scenarios. 

Equity: India’s equity market is expected to deliver modest to moderate returns of 8–12% over the next 12 months, with the Nifty 50 projected to reach 26,000–28,000. The outlook is cautiously optimistic, supported by domestic flows, structural reforms, and expected RBI rate cuts. Correction is not ruled out, tempered by high valuations, global uncertainties, tariff risk and recession fear.

Market Outlook – Medium Term

FY26, the Asian economy is projected to grow at a rate of 4.4%, while the world economy is projected to grow at a rate of 3%. The predicted growth rates for the US, China, and India are 1.8%, 4%, and 6.3%, respectively. 

The Asian economy is expected to account for 57% of the world economy, up from 41% currently, by 2030. 

India has around 10 lakh crore in corporate reserves and is expected to see that being deployed in capex. Over the next 4-6 quarters, as that money is converted into productive assets, India could add USD 1 trillion to the economy, moving from USD 4 trillion to USD 5 trillion. 

HSBC Report: HSBC’s research estimates India’s discretionary spending base at about $250 billion, meaning the upcoming stimulus could increase spending capacity by nearly 15% and peg the annual boost to discretionary consumption between $30–40 billion. The math stacks up quickly: lower personal taxes alone are expected to free up $12 billion in savings. If the 8th Pay Commission delivers its anticipated 15% salary hike, another $18–26 billion could land in the hands of government and defence employees. Add $3–4 billion in mortgage savings from falling interest rates. 

Other Factors: Demographic Dividend, China Plus Policy, Infrastructure development & Government reforms are expected to support Bharat’s GDP growth. 

Things to Keep in Mind

A staggered way of investing is always advised with a diversification approach. Continue the SIP/STP approach and avoid aggressive lumpsum calls for now. 

Use a market fall as an opportunity to buy more and don’t panic.

Mostly all products are launched at the peak of the market to easily sell them to the customers; hence, discipline is important to avoid investing in too many products, which could become difficult to manage. 

The recent SEBI action against Jane Street has sent shockwaves through India’s trading community. The accusations are serious: allegedly manipulating the Bank Nifty index through coordinated buying and selling strategies, making billions whilst retail traders suffered massive losses. We keep telling our customers to avoid trading. These issues keep happening and regulators are doing their job. It’s largely irrelevant to the genuine investor, as influencing the value of good businesses for the long term is not possible. 

Financial planning is crucial: Two things financial planning teaches us are: 1) Spending on housing, a car, or travel is fine, but invest first to reach your financial objectives. 2) Savings are not enough, investing in the right asset class is important to reach financial goals more efficiently. 

Maintain an emergency fund. 

Protect yourselves from the unforeseen events.

Disclaimer: The above charts and returns are only for representation purposes. There is no assurance of any returns whatsoever. Stocks/mutual fund investments are subject to market risks; read all scheme-related documents carefully. The NAVs and stock prices may go up or down depending on the factors and forces affecting the securities market. The past performance of the stocks/mutual funds is not necessarily indicative of future performance. I/We are not guaranteeing or assuring any return or dividend under any of the stocks/schemes and the same is subject to the availability and adequacy of distributable surplus.