Market Review April 2025

World Happenings:
April 2025 was marked by significant global events that influenced investor sentiment. On April 22, a devastating terrorist attack occurred in Baisaran Valley near Pahalgam, Jammu and Kashmir, where gunmen killed 26 tourists, making it one of the deadliest civilian attacks in the region in recent years. The incident escalated tensions between India and Pakistan, leading to diplomatic strains and military exchanges along the Line of Control.

Donald Trump announced sweeping reciprocal tariffs targeting multiple countries. India faced a 26% tariff, which initially caused concern among Indian exporters and investors. China was subjected to a significantly higher tariff, escalating to 125% by mid-April. While the U.S. later agreed to a 90-day suspension of heightened tariffs with China, reducing them to 30% following negotiations in Geneva, this temporary relief did not extend to India.

Climate concerns also intensified, with April 2025 recorded as the second-warmest April globally. Additionally, the world mourned the passing of Pope Francis at the age of 88, leading to a state funeral attended by global leaders.

Market Roundup:
The Indian stock market saw a steady performance in April 2025. The Sensex began the month at 76,882.58 and closed at 80,242.24, registering a gain of over 4.4%, despite heightened geopolitical tensions and global economic uncertainties. The market's resilience was supported by robust domestic fundamentals and consistent retail investor activity.

Gold remained volatile in April 2025. Prices opened the month at ₹92,840 per 10 grams (24K) and surged to an all-time high of ₹1,01,350 on April 22, driven by global economic uncertainties and rising geopolitical tensions. However, the rally was short-lived, prices corrected to ₹98,350 by April 23 and eventually settled at ₹97,910 on April 30. Despite consistent outflows from Gold ETFs, both physical and digital gold witnessed renewed interest, particularly in the latter half of the month.

In the mutual fund space, equity mutual funds saw net inflows of ₹24,253 crore in April, a 3.2% decline from ₹25,017 crore in March. This marks the fourth consecutive month of declining equity inflows and the lowest since April 2024. However, total assets under management (AUM) of the Indian mutual fund industry rose to ₹69.99 lakh crore in April, up from ₹65.74 lakh crore in March.

Despite global jitters, SIP (Systematic Investment Plan) contributions hit an all-time high of ₹26,632 crore in April 2025. SIP AUM also increased from ₹13.35 lakh crore in March to ₹13.89 lakh crore in April, reflecting continued investor commitment to disciplined investing. However, this came against the backdrop of a rising SIP stoppage ratio, which surged to 75.63% for FY25, indicating that for every 100 new SIPs registered, over 75 were discontinued. This suggests that while more investors are contributing higher amounts, many others are either pausing or exiting their SIPs.

Large-cap funds attracted ₹2,671 crore, reversing a two-month dip. Mid-cap and small-cap funds continued to draw investor interest, with inflows of ₹3,313 crore and ₹3,999 crore, respectively, though slightly lower than March. Dividend yield funds, however, saw inflows drop to just ₹51 crore, compared to ₹140.5 crore in March.

Sectoral and thematic funds staged a comeback with net inflows of ₹2,000 crore, a sharp rise from just ₹170 crore in March. Exchange-Traded Funds (ETFs) remained in favor, recording strong net inflows of ₹19,056.7 crore, up from ₹10,962 crore in March. Meanwhile, Gold ETFs registered a third straight month of outflows at ₹5.82 crore, following ₹77 crore in March.

In the debt category, corporate bond funds turned positive with inflows of ₹3,458 crore, bouncing back from a ₹414 crore outflow. However, credit risk funds continued to witness redemptions, with ₹301.7 crore flowing out.

Conclusion:
April 2025 was a month of sharp contrasts. On one hand, global events, including terrorist attacks, trade shocks, and leadership changes cast a shadow over investor confidence. On the other hand, Indian markets held their ground, and SIP investments hit record highs, showing that disciplined investing is still alive and well.

That said, the rise in SIP stoppage ratio is a warning sign. Market volatility may lead some investors to pause or withdraw, but true wealth creation lies in consistency. If you’ve hit pause on your SIPs, it’s time to rethink. Uncertainty is a part of markets but quitting is not what long-term investors do. Stay invested. Stay committed.

Sources:
AMFI, CNBC18 & Moneycontrol

Sapna Jain

Collaborations & Partnerships team | FIKAA