India stocks close fiscal 2025 higher as March gains bail out benchmarks

MUMBAI: A rally in India’s Nifty 50 stock index in March, its best jump in 15 months, helped the benchmark pull back from losses after a historic five-month losing streak and finish this financial year with gains.

The index of 50 bluechip stocks rose 6.3% in March, contributing to 5.34% gains for the fiscal year that runs from April to March, while the BSE Sensex advanced 5.1%. The benchmarks were in the red as recently as March 4.

The rally was driven by investors scooping up beaten-down stocks, the return of foreign inflows after a selling spree that began in late-September and improving economic indicators.

Although foreign investors poured $2.65 billion into Indian stocks in the last five sessions, it wasn’t enough to offset foreign outflows of $15.57 billion for the fiscal year, the second-highest ever.

HDFC Securities’ CEO Dhiraj Relli cited lacklustre earnings, US tariff worries, foreign outflows, geopolitical tensions, a strong dollar, and Chinese stimulus as key events that fuelled volatility in the market.

After rising about 16% in the first-half of the fiscal, the Nifty 50 erased those gains in the next five months.

Foreign investors pulled out money from India and rushed to China, following a string of stimulus announcements and artificial intelligence-related developments.

While shares in China, Hong Kong and Singapore rose, those in export- and tech-heavy countries like Japan and South Korea fell in fiscal 2025 due to tariff worries.

Back home, while the correction has eased valuation concerns and signs of an economic recovery have emerged, tariff threats continue to loom.

Although the Nifty is still down 10.5% from its record highs in late September, market participants believe the worst is over for Indian equities.

“The fiscal year 2026 looks lot more promising than FY2025 as we are seeing reasonable valuations,” said Chandraprakash Padiyar, senior fund manager at Tata Asset Management, adding that the risk-reward has turned favourable for banks, oil and gas and real estate after the correction. HDFC Securities’ Relli expects Nifty earnings to grow between 12% and 15% in the next two fiscals and has forecast market returns in line with earnings growth.