Market Review September 2025

World Happenings:
September 2025 witnessed a blend of cautious optimism and economic recalibration across global markets. In the United States, the Federal Reserve maintained its policy stance, keeping interest rates unchanged while reiterating its commitment to monitor inflation trends closely. European markets remained steady, with the European Central Bank signaling a continued accommodative policy to support slowing growth in the Eurozone.

In Asia, China’s manufacturing and export data showed mixed signals, reflecting a gradual recovery. However, concerns over global trade and commodity volatility persisted, prompting investors to balance risk exposure across assets. Overall, global sentiment leaned toward prudence, as markets awaited clearer cues on inflation, interest rates, and geopolitical developments.

Market Roundup:
Indian equity markets displayed resilience in September amid mixed global cues and persistent FPI outflows. Strong domestic inflows through SIPs and mutual funds helped offset external selling pressure, leading to a largely range-bound performance during the month.

- Sensex: Ended September 2025 slightly lower, closing at around 81,200, reflecting a mild correction from August’s close.
- Nifty 50: Hovered near the 24,700–24,900 zone, marking marginal declines amid profit-booking in select large-cap stocks.

Foreign Portfolio Investors (FPIs) withdrew approximately ₹7,945 crore from Indian equities during the month, influenced by global uncertainty and currency volatility. On the other hand, Domestic Institutional Investors (DIIs) remained net buyers, led by strong mutual fund participation, particularly in the banking and financial sectors.

Mutual Fund Industry Performance:

- Total Inflows: The industry recorded steady inflows, supported by growing participation in hybrid and multi-asset funds.
- Equity Mutual Funds: Maintained stable inflows as investors stayed focused on long-term growth themes, despite global volatility.
- Multi-Asset Funds: Saw a 41% jump in inflows to ₹4,982 crore, indicating investor preference for balanced diversification.
- Gold ETFs: Witnessed their largest-ever monthly inflow of around $902 million (~7.3 tons), pushing total AUM to a record $10 billion, as investors sought safe-haven assets amid market uncertainty.
- SIPs (Systematic Investment Plans): Achieved a new all-time high of ₹29,361 crore, up 4% from August’s ₹28,265 crore, showcasing robust investor confidence in disciplined investing.

Sectoral Insights:

- Banking and Financials: Continued to attract institutional buying, with funds adding positions in leading names such as Kotak Mahindra Bank and ICICI Bank, totaling purchases worth over ₹3,000 crore.
- Consumer Goods: Remained stable, supported by festive season demand and the implementation of GST 2.0, which is expected to reduce prices for several consumables.
- Automobile Sector: Witnessed improving sales momentum, particularly in two-wheelers, ahead of the festive season, with states like Gujarat reporting up to 38% growth in September.
- Gold and Precious Metals: Gold and silver prices experienced notable increases during September 2025. Gold traded in a range of approximately ₹1,04,000–₹1,15,000 per 10 grams, while silver moved between 1,26,000–₹1,41,000 per kilogram, reflecting strong gains over the month. This uptick was driven by robust industrial demand, particularly in sectors like solar energy and electronics, coupled with tightening global supply. The surge in silver prices also led to increased interest in silver ETFs, highlighting a shift in investor preference toward precious metals amid global uncertainties.

Conclusion:
September 2025 was a month of stability and selective optimism for Indian investors. Despite global headwinds and FPI outflows, strong SIP contributions, steady mutual fund participation, and easing inflation data supported market sentiment.

With retail inflation easing sharply to 1.54%, its lowest level in eight years, and wholesale inflation dropping to 0.13%, the economic backdrop appears favorable for a more accommodative stance by the RBI in the coming quarters.

Investors are advised to maintain a diversified portfolio across equities, hybrid, and gold assets, continue SIP investments for long-term compounding, and remain attentive to evolving global monetary and inflation trends.

Sources:
Reuters, Economic Times, Times of India, AMFI, Business Insider, NSE, Moneycontrol, Mint, Trading Economics, Global X ETFs, OECD

Seral Mehta

Senior Financial Product Analyst | FIKAA