April Market Insights – A Steady Rebound on Social Ground

Dear Investors,

As global and domestic factors continue to shape India’s investment landscape, April brought a welcome rebound in Indian equities, driven by cooling inflation, improving foreign fund flows, and continued strength in core economic fundamentals. At PMS AIF WORLD, our focus remains on longterm, disciplined investing—navigating near-term volatility while positioning portfolios for enduring growth.

FII Flows: The Return of Confidence

After a rocky Q1, FIIs turned net buyers in April, investing ₹3,200 crore—marking their first positive month in 2025.
• The biggest beneficiary? Banking & Financials, with a record ₹18,400 crore inflow.
• This FII return lifted sentiment and pushed Nifty 50 up by 3.5%, supported by better liquidity.

Geopolitics: Risks, Realignment & Resilience

While Eastern European conflict and US-China friction remained overhangs, a deescalation in the US India trade standoff improved global risk sentiment.
• Early signs of manufacturing shift to India are visible in export orders.
• Markets responded positively to pragmatic diplomacy and supply-chain realignment.

RBI Policy: Growth Gets a Boost
In a surprise yet welcome move, the RBI cut the repo rate by 25 bps to 6%, shifting to an “accommodative” stance.
• Inflation well under control (March CPI at 3.34%) enabled this policy shift.
• Lower borrowing costs gave a tailwind to real estate, autos, and financials, energizing markets

India Macro: Steady as She Goes
• Inflation is not just tamed—it’s back within comfort range (mid-3% expected in FY26).
• A combination of soft food prices, stable energy costs, and a healthy base effect has aided this trend.
• Stable inflation = stronger consumption and a more supportive central bank.

Investor Sentiment: Resilient & Rational
Indian investors continued to show maturity and discipline:

• Direct equity participation is strong, with new demat accounts and steady trading volumes.
• There’s a clear shift to quality and value, not just momentum.
•  Debt allocations earlier in the year are now balancing with selective equity re-entry.

This measured optimism is fuelled by conviction in India’s long-term growth—not short-term noise.

From 2021 to 2024, Indian equities witnessed a broad-based rally driven by strong sectoral tailwinds and robust wage growth averaging ~20% annually. However, in 2025, wage growth has moderated to ~5%, signaling that the broad-based momentum is behind us. We believe the next phase of market performance will be driven not by sectors, but by businesses capable of capturing disproportionate value.

India, now a $4 trillion economy growing at a nominal rate of ~10%, is adding approximately $400 billion in new value each year. In this backdrop, there is ample opportunity for select companies to emerge as massive wealth creators. The challenge is in identifying them.

Going forward, the markets are expected to be less forgiving, and stock selection will play a pivotal role. This shift will pose challenges for mutual funds that are typically constrained by liquidity requirements and tend to remain invested in index-heavy names. While sector-wide returns may moderate, exceptional businesses within those sectors will likely outperform, as capital begins to chase fewer, high-quality names.

A potential de-escalation of global conflicts and resolution of trade tariffs may provide the next meaningful leg up for markets.

At PMS AIF WORLD, we are committed to helping you navigate this evolving landscape. Please feel free to reach out with any queries or for assistance in making informed investment decisions.

Our endeavors are to determine the Quality, Risk, and Consistency attributes (QRC). We present all data and analytics with an endeavor and the aim of informed investment decisions. If you are looking to invest and are not able to decide between PMS and Mutual Funds, or between PMS and Alternative investment funds, Book A Video Call with our experts.