Key Facts
• Indian stock market showed strong recovery since March 2025, maintaining momentum in June.
• Nifty50 Index rose 3.1% in June, marking a fourth consecutive monthly increase.
• Mid-cap stocks (Nifty Midcap150) gained 4.1%, while small-cap stocks (Nifty Smallcap250) surged 5.7%.
• June saw a net inflow of ¥11.9 billion into Indian equity mutual funds, following ¥15.1 billion in May.
• Small and mid-cap-focused funds attracted the highest inflows among Indian equity fund types.
• Active funds investing in the entire Indian market experienced slight outflows due to profit-taking.
• Foreign equity mutual funds saw a slowdown in inflows, from ¥92 billion in May to ¥52 billion in June.
• The Reserve Bank of India’s unexpected 0.50% rate cut boosted investor confidence despite rising oil prices.
• Japanese investors are increasingly targeting Indian small and mid-cap stocks for higher returns.
Summary
The Indian stock market has shown robust recovery since March 2025, with June marking the fourth consecutive month of growth. Small and mid-cap stocks led the charge, with gains of 5.7% and 4.1%, respectively. This trend has reignited interest in Indian equity mutual funds, particularly those focused on small and mid-cap stocks, which saw ¥11.9 billion in net inflows in June. The Reserve Bank of India’s bold 0.50% rate cut played a key role in boosting market sentiment, countering concerns over rising oil prices. While foreign equity mutual funds experienced a slowdown in inflows, Indian equity funds demonstrated relative strength, driven by investor appetite for higher returns. Active funds covering the entire Indian market saw slight outflows due to profit-taking, but overall, the market remains on a recovery trajectory.
