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June 2025 Market Summary

 Global Focus: Japan’s Bond Market Turmoil

  • Japan's long-dated government bonds faced significant sell-offs due to the Bank of Japan’s (BoJ) gradual exit from ultra-loose monetary policy.

  • Rising inflation, fiscal concerns, and regulatory changes have triggered volatility, leading investors to demand higher yields.

  • There are concerns that a broader sell-off could cause yen repatriation and unwind carry trades, potentially influencing global markets.

India Market Snapshot

  • Indian equities showed resilience with strong domestic institutional investor (DII) support, despite foreign institutional investor (FII) outflows.

  • Sectoral FII flows were highest in Financial Services and Telecom, while IT saw significant outflows.

  • Equity valuations across large, mid, and small caps edged higher, with market momentum improving—especially in Financials and Industrials.

Currency and Global Performance

  • The Indian rupee underperformed most emerging market currencies.

  • Equity markets globally posted positive returns, with India’s MSCI index catching up with U.S. peers after a dip in late 2024.

Sector Highlights

  • Media was the top-performing sector in May, while FMCG underperformed.

  • Market momentum is broad-based but strongest in Financials, Industrials, and Materials sectors.

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