Indian equities bounce back in a still volatile environment
On the one hand, border tensions with Pakistan and on the other, an important negotiation with the US on tariffs. For Indian equities, this has been a period of high volatility, but also one of strength relative to other global equity markets.
After a sharp correction and a period of uncertainty in early 2025, Indian equities are showing signs of recovery and a potential improvement in sentiment, supported by solid economic fundamentals and a possible trade détente with the US. Recent tensions with Pakistan do not appear to be changing the picture at the moment.
Since March 2025, there has been a rally with the Nifty 50 Index gaining 6.3% for the month, contributing to a gain of 5.34% for the fiscal year (April 2024 – March 2025), supported by bearish equity buying, reassuring macroeconomic data and the return of foreign investors seeking diversification.
Looking at the relative strength ratio between the MSCI India index and the S&P500, the turnaround that began in March is clearly visible, with the indicator having almost fully recovered the levels of mid-2000. From a technical point of view, the 200 average is still above the 50 average, and a cross to the upside could give the Indian index a further boost.
The story is similar if we compare the MSCI India with the MSCI World. Here, too, we have seen the turnaround that began last March and the hesitation of recent weeks amid uncertainty over tariffs and tensions with Pakistan.
