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The Indian stock market experienced a roller-coaster ride in the financial year ended March 31, 2025, as aggressive selling by overseas fund managers in the second-half of the year weighed on sentiment. 119833938Despite this, the Nifty 50 index managed to close FY2025 with a 5.3% gain, while the Nifty Midcap 150 and Smallcap 250 rose 5.73% and 2.32%, respectively. Foreign portfolio investors (FPIs) offloaded shares worth Rs 1.25 lakh crore during the year. 119833946The resilience of Indian equities was driven by strong domestic investor participation, with mutual funds and retail investors pumping in a record Rs 6 lakh crore into the market. 119833955Sectorally, the Nifty Defence index emerged as the top performer, surging 33% in FY2025, while Financials and Healthcare indices recorded gains of 18% and 12%, respectively. On the flip side, Media, Energy, PSU Banks, and Realty indices underperformed, delivering negative returns during FY25.

Mumbai: Yields on the 10-year benchmark government securities are expected to ease 25 to 30 basis points to 6.25% to 6.30% in FY 26, building on last fiscal year's rather steep decline, amid expectations of further reductions in the policy repo rates and strong demand for bonds, experts said. Rates on home loans will likely ease, after being at a peak for three years.The 10-year benchmark yield closed at 6.57% on Friday, the last trading day of FY25. Over this financial year, the 10-year yield softened 47 basis points, its steepest retreat in five years, according to LSEG data."There are tailwinds that should bring down the benchmark yield and our December 2025 forecast is 6.30% and yields could also soften further," said Dhiraj Nim, economist & FX Strategist at ANZ Bank. "From a fiscal supply perspective, we are pretty disciplined and expectations of a fiscal deficit at 4.4% of GDP are supporting the market. From a demand perspective, banks will probably have a stronger appetite for bonds."119833718Softer government bond yields reduce overall boring costs for companies, as g-sec yields are used as a benchmark for corporate bonds.The announcement of the borrowing calendar for the first half of FY 26 also supported softening of yields as it was in line with market expectations of 54% to 55%. The government would be borrowing 54% - ₹8 lakh crore - of the total borrowing in FY26 during the first half.Heightened expectations of a rate cut are fueling softening of sovereign yields."Against the consensus view of approximately 50 basis point of additional easing, we continue to expect 75 basis point of further cuts to a terminal rate of 5.50% by end-2025, with 25 basis point cuts each in April, June and August," Nomura said in a recent report. RBI cut its repo rate by 25 basis points to 6.25% in February. This was followed by banks cutting interest rates of loans linked to the repo rate, like interest rates on the home loan.