Market Review June 2025

World Happenings:
June 2025 was marked by a mix of optimism and caution on the global landscape. Diplomatic efforts led to a 90-day tariff pause between the U.S. and China, reducing trade tensions and stabilizing risk sentiment. In the Middle East, ongoing negotiations contributed to a temporary easing of hostilities. Central banks, including the Federal Reserve, European Central Bank, and Bank of Japan, held pivotal meetings that influenced global financial markets. Notably, U.S. core inflation slowed to 2.3% year-over-year, prompting a softer stance from the Fed, while Eurozone inflation edged up to 2.0%. Robust corporate earnings, particularly from technology and AI-driven sectors, further buoyed investor confidence.

Market Roundup:
Indian equities experienced notable volatility in June, but the market displayed resilience overall. The Sensex began the month with strong momentum, briefly surpassing the 84,000 level, and ultimately closed at 83,606.46, reflecting a marginal decline of 0.54% for the month. The Nifty 50 followed a similar trajectory, ending at 25,517.05. Gold maintained its status as a safe-haven asset amid ongoing geopolitical uncertainties, gaining 0.69% during the month as investors sought stability.

June turned out to be a solid month for the mutual fund industry, with total inflows rising by 67% month-on-month to ₹49,301 crore. The total AUM of the industry touched ₹74.14 lakh crore, up 3% from May. Equity mutual funds continued their upward march, clocking ₹23,587 crore in net inflows, a 24% jump from ₹19,013 crore in May. However, ELSS funds remained under pressure, witnessing outflows for the third month in a row, with ₹556 crore withdrawn.

The debt fund category remained mixed. While total outflows stood at ₹1,711 crore, far lower than May’s ₹15,908 crore, the trends were split across sub-categories. Short duration funds led the inflows with ₹10,276 crore, followed by money market funds with ₹9,484 crore. On the other hand, liquid funds saw the sharpest pullback with an outflow of ₹25,196 crore, reversing the large inflows seen last month.

Hybrid funds saw a healthy rise of 12% in inflows, garnering ₹23,222 crore compared to ₹20,765 crore in May. Arbitrage funds led the category with ₹15,584 crore in inflows, while aggressive hybrid funds witnessed a strong surge of nearly 290%, jumping from ₹341 crore in May to ₹1,331 crore in June.

In the passive and “other” schemes category, inflows dipped by 28% to ₹3,997 crore. Still, Gold ETFs shone bright with ₹2,080 crore in inflows, a 613% surge compared to the previous month, indicating rising investor interest in gold as a safe-haven asset.

Overall, the mutual fund industry saw broad-based participation in June, with equity, short-term debt, hybrid, and gold-related products gaining traction, while liquid and passive segments saw some cooling off.

Conclusion:
June 2025 reinforced the underlying strength of Indian markets despite global uncertainties and intermittent volatility. The Sensex held firm near record highs, gold continued to offer stability as a safe-haven, and mutual funds saw a sharp rebound in investor participation across equity and hybrid categories. The month’s performance demonstrates the enduring confidence of investors and the value of maintaining a disciplined, diversified investment strategy, even as external risks and market fluctuations persist. For investors, the key takeaway remains clear: staying consistent, diversified, and aligned with long-term goals pays off, even when the headlines fluctuate.

Sources:
Times of India, AMFI, The economic times

Sapna Mehta

Collaborations & Partnerships team | FIKAA