Nifty 50 & Sensex: What the First Half of 2025 Says?

Indian stock markets have experienced some ups and downs in the first half of 2025. However, both the Nifty 50 and Sensex saw steady gains, supported by a healthy economy and better corporate earnings. In this article, we will look at the detailed performance of these key indices and explore the sectors that drove the market rally.

A Quick Performance Snapshot of Nifty 50 and Sensex

The Nifty 50 closed at 24,716.60 on June 2, 2025, reflecting a steady upward trend through the first half of the year. According to the NSE data, the index delivered a year-to-date (YTD) return of approximately 9.85%. This performance highlights continued investor confidence, driven by stable macroeconomic indicators and corporate earnings growth.

In late May, the Nifty briefly crossed the 25,000 mark, touching a high of 25,079.20, a level that has since acted as a key resistance point. Despite this upward momentum, the index has struggled to hold above this threshold, consolidating slightly lower in early June amid persistent global uncertainties and technical selling pressure.

On the other hand, as of June 2, 2025, the Sensex closed at 81,373.75, marking a year-to-date (YTD) gain of 4.38%, or approximately 3,424 points from its January opening level. While this reflects a positive trend, the pace of growth has been more measured compared to the Nifty 50, largely due to sectoral weight differences and varied stock-level performances within the index.

Although the Sensex had reached a record high of 85,978.25 in September 2024, it has since remained in a consolidation phase. For most of 2025, the index has traded within a broad range of 80,000 to 82,500, indicating a period of sideways movement despite strong underlying fundamentals.

Key Reasons for Market Performance in 2025

Let’s have a look at what the key reasons are behind market performance in H1CY2025.

As per official estimates, GDP grew by 7.4% in Q4 FY25 (January to March 2025), beating expectations and reinforcing India’s position as one of the fastest-growing large economies. For the entire FY2024–25, GDP growth stood at 6.5%. This solid economic foundation helped shield the markets from steep corrections, even amid persistent global uncertainties.

Between January and May 2025, FIIs and DIIs displayed contrasting behaviors.

FIIs began the year with heavy outflows, over ₹1.14 lakh crore in January and February combined, but reversed course from March onward. By May 2025, they recorded strong inflows of ₹11,773 crore, supported by easing global inflation and expectations of U.S. rate cuts.

DIIs, on the other hand, remained consistent net buyers every month. They pumped in over ₹2.84 lakh crore during these five months, with ₹67,642 crore added in May alone, their highest monthly inflow so far in 2025.

While FIIs were selling, DIIs kept buying, which helped the markets remain steady and showed their belief in India’s economic strength.

Rising global trade tensions, especially after the U.S. imposed a 50% tariff on steel and aluminium imports, have raised concerns for Indian exporters. The prolonged Russia-Ukraine conflict has heightened volatility across global markets, affecting India’s equity indices as well.

Moreover, renewed US-China trade disputes and persistent inflation concerns have reduced risk appetite among international investors, adding further pressure on market sentiment.

In 2025, India’s top 500 companies achieved a record net profit of ₹15.07 lakh crore, representing an 11.4% increase despite many earnings downgrades across the market. Growth was led by sectors such as telecom, agriculture, and consumer staples, while oil and gas companies saw a decline in profits.

The IMF forecasts India will continue to be the fastest-growing major economy, with an estimated growth rate of around 6.2% in 2025 and 6.3% in 2026.  Despite ongoing global uncertainties and concerns about market valuations, strong corporate earnings and solid economic fundamentals support a positive outlook for the rest of the year.

Market Outlook for the Second Half of 2025

The Indian equity markets are expected to maintain a steady upward trajectory in the second half of 2025, backed by strong domestic fundamentals. Nomura recently revised its Nifty 50 target to 26,140, citing supportive valuations and a resilient economy. On the Sensex front, Morgan Stanley estimates a year-end target of 93,000, with a bullish case extending to 105,000, depending on global economic trends.

However, many warn of potential short-term volatility due to high valuations and global uncertainties, including U.S. tariff policies. Despite these risks, the consensus among experts suggests that India's strong economic fundamentals and corporate earnings growth will support market resilience and potential gains in the latter half of the year.

Conclusion

The first half of 2025 saw the Nifty 50 and Sensex deliver slow but steady gains, supported by solid economic growth and corporate performance. Despite global uncertainties, domestic strength kept market sentiment positive. Looking ahead, investors remain cautiously optimistic about further upside in the second half.